U.S. Imposes Aluminum & Steel Import Tariffs on Canada, Mexico & the European Union

U.S. Imposes Aluminum & Steel Import Tariffs  on Canada, Mexico & the European Union

When American President Donald Trump announced steep import tariffs on aluminum and steel Canada and Mexico were temporarily exempt due to ongoing North American Free Trade Agreement negotiations.

That all ended on June 1 when the Trump administration put the tariffs into effect for the European Union (EU), Canada and Mexico, citing a need for the “protection of America’s national security from the effects of global oversupply.” Imports of steel from these regions will be subject to a 25 percent tariff, while imports of aluminum will be subject to a 10 percent tariff.

The Canadian government responded immediately, indicating it would counter with tariffs of its own on steel and other products such as yogurt, meat and jam from the U.S.

Jean-Claude Juncker, head of the European Commission, said there will be retaliatory  measures from the EU, which had already released a list of American products under consideration for import taxes, such as bourbon, orange juice, motorcycles and jeans.

American manufacturers, however, will carry the heaviest burden as a result of these tariffs. While the tariffs are intended to encourage companies to purchase from American steel and aluminum manufacturers, there isn’t enough American supply to meet demand.

The president of the American International Automobile Dealers Association called the tariffs a “self-inflicted economic disaster”, stating that the automobile manufacturing industry relies on competitively-priced materials to produce vehicles.

American companies will need to continue to import steel and aluminum to complete product orders, but now face significantly higher material costs. Companies will have to decide whether to absorb the costs or raise prices and pass them on to consumers.

Accurately calculating tariffs is essential to avoiding unexpected costs. To do so, companies should collect country of origin certificates from suppliers and cross-reference them against tariff schedules.

Assent Compliance’s Vendor Management Suite provides customers the ability to easily collect country of origin data and HS/HTS code information to accurately calculate tariff costs.

For more information about how Assent can help you mitigate the risk of unexpected tariffs in your supply chain, email info@assentcompliance.com.