There have been significant developments on several trade issues in the past 10 days. On May 31, 2018, steel and aluminum tariffs went into effect after temporary exemptions expired for many US allies including the EU, Canada, and Mexico, leaving only a few countries exempt and many others contemplating retaliatory tariffs on US products.
Two days earlier, the Trump Administration announced it would be moving forward with Section 301 tariffs on Chinese goods. Meanwhile, the Department of Commerce has initiated a Section 232 investigation to determine if imports of automobiles and corresponding parts threaten to impair national security, and whether tariffs are appropriate to combat that threat.
Finally, but likely not last in US trade developments, NAFTA negotiations appear to have all but ended as Mexico and Canada react to the current steel and aluminum tariffs and the threat of Section 232 tariffs on automobiles.
The Trump Administration’s actions have created a volatile environment for importers and exporters, not only by imposing new tariffs on a number of imports, but also by triggering retaliatory tariffs from some of the closest US allies and its largest trading partners. All businesses with international supply chain flows need to monitor closely trade developments to assess how the new tariffs will affect their business and their investment decisions, and consider possible solutions for risk mitigation.