President Trump has announced that steel and aluminum tariffs imposed to protect domestic industry under the auspices of national security concerns will be postponed for certain US allies, at least until June 1, 2018. The tariffs of 10% on certain aluminum products and 25% on certain steel products went into effect on March 23, 2018 for all imports regardless of origin, with temporary exemptions for Canada, Mexico, the European Union, South Korea, Argentina, Australia, and Brazil. The exemptions had been set to expire at midnight on April 30, 2018. These seven trading partners are in various stages of negotiations with the United States to reach agreements that would provide them with permanent exemptions from the tariffs.
The Administration clearly is taking an aggressive stance on trade as evidenced by the recent steel and aluminum tariffs, even with some of the country’s closest geopolitical allies. As the case of South Korea shows, even in the absence of explicit tariff barriers the Administration will push for non-tariff restrictions on imports in the metals industry. Temporary extensions of the tariffs are serving as a bargaining chip in larger negotiations with some of America’s most important trading partners. Companies in affected industries should continue monitoring the progress of negotiations with the EU, Mexico, and Canada.