US Section 232 tariffs to allow for exclusions by product: DiMicco

The Section 232 tariffs expected from US President Donald Trump this week will be accompanied by an exclusions process for items that are not available in the United States, according to Nucor chairman emeritus and Trump confidant Daniel DiMicco.

DiMicco, speaking at a pro-tariff press conference on Wednesday March 7, said customers for steel and aluminium products would be offered a petition framework whereby they could ask that their imported items not be subject to the tariff.

“There will be a process whereby people can apply for an exclusion by product, but they will need to make a strong case that the product is not available here and can’t be made here,” DiMicco said. “People will have to prove the need, and the inability of the domestic market to make it or an unwillingness by the domestic producers to make it.”

Trump’s tariff plan does not contain a formal exclusion process for any countries, DiMicco said on Wednesday. But later in the day, White House press secretary Sarah Huckabee Sanders left the door open for national exemptions, stating that there may be “potential carve-outs” for Canada and Mexico for national security reasons.

Trump has said he intends to place 25% tariffs on steel imports and 10% tariffs on aluminium imports. The proposal has been met with fierce opposition from many business groups that eschew protectionism and fear those remedies will trigger a trade war - jeopardizing a broad array of US exports, ranging from soybeans to blue jeans to motorcycles.

Still, on the pro-tariff side, the Alliance for American Manufacturing (AAM) organized the press conference call with DiMicco and others. AAM president Scott Paul said he expects Trump to formalize the tariffs in advance of a presidential visit to western Pennsylvania this weekend.

The ability of US steel mills to produce items currently unavailable domestically has been a subject of debate ever since the 232 investigation was announced in 2017.

Buyers argued that certain line pipe grades and sizes are not offered domestically, and various electrical steels, wire rod, tinplate, hot-dipped galvanized steel and thin-gauge aluminium also have been mentioned.

American Metal Market’s pricing assessment for US domestic hot-dipped galvanized coil stands at $48.75 per hundredweight fob mill. That price was below $44 per cwt as recently as November.

The idea of allowing customers to request that their imported item be excluded from the tariffs has been promoted by other backers of the 232 import curbs. Barry Zekelman, executive chairman and chief executive officer of Zekelman Industries, in June 2017 said downstream businesses should have the ability to petition the US Commerce Department for a ruling on whether items would be available from domestic producers.

DiMicco in December was appointed to the Advisory Committee for Trade Policy and Negotiations, which advises the US Trade Representative. Before that, he was the top trade adviser to Trump’s presidential campaign.

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