Just when we thought the year was winding down, more tariff turbulence was introduced early last week. Last Monday, the Trump Administration announced the resurrection of tariffs on steel and aluminum products from Brazil and Argentina. Some may recall that the 25% steel tariff and 10% aluminum tariff were originally enacted in May of 2018, but were exempted in exchange for quotas in August of this year.
At the time of their enactment, the steel and aluminum tariffs were seen largely as protectionary, with President Trump citing that trade policies posed an unfair disadvantage to the United States. Monday’s announcement largely focused on the devaluation of the currencies of Argentina and Brazil and the negative impact it has on U.S. farmers.
There are two words that make this tariff announcement stand out among the numerous others we’ve seen this year: “effective immediately.” The announcement itself came as a shock to all countries involved—especially the United States. The tariffs we’ve seen in the past, while still typically abrupt, usually give enough notice to allow imports on the water to arrive at American ports without being subject to the tax. Instead, importers are being completely blindsided by the steep increase.
In addition to the newly enacted tariffs for Brazil and Argentina, there are threats of far harsher tariffs targeting France, with the possibility of similar action against Austria, Italy, and Turkey. If imposed, these would be largely retributory against France’s Digital Services Tax, which a USTR investigation has concluded unfairly targets U.S.-based companies.
The potential French tariffs could include duties as high as 100% on 63 tariff subheadings, including products like cheese, yogurt, wine, and makeup. In total, the tariffs could be imposed on approximately $2.4 billion worth of imports. No official announcements have been made yet, but the USTR promises to move swiftly after public hearings conclude in the first two weeks of the new year.
As the year wraps up, we can expect a lot of impact from these trade disputes. The impact of the steel and aluminum tariffs will be felt soon, and the Section 301 List 4B tariffs are still anticipated to go into effect on the 15th. For questions about what these changes mean for your supply chain, contact your trusted customs broker or reach out to Navegate’s team.
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