By Alex Simon, SBDC EAN Trade Counselor
The U.S. government recently implemented a series of tariffs month that targeted imports of metals. These actions have prompted a flurry of retaliatory tariffs from the European Union, China, Canada and Mexico.
The steady influx of information regarding these tariffs can certainly be overwhelming and confusing, however, our team, the Small Business Development Center Export Assistance (SBDC EAN), is prepared to help you make sense of what the potential impact might be for your business.
The European Commission imposed tariffs on $3.2 billion worth of U.S. exports on June 22, 2018. The new tariff rate will range from 10 to 25 percent depending on the product. Affected products include articles made of iron or steel (pipes, furniture/appliances, containers), agricultural goods (corn, tobacco, whisky, vegetables, fruits, nuts) and apparel made of cotton.
On June 16, China announced a plan for new tariffs against U.S. goods effective July 6. This tariff constitutes a 25% increase from current rates. It is important to note that while this new tariff is distinct from the earlier round imposed by China in April, products that were affected by both the April tariff and the July 6 tariff will be subjected to a duty that is the aggregate total of the two tariffs.
The plan that China announced has been divided into two waves dubbed "Schedule I" and "Schedule II." The Schedule I tariffs were enacted on July 6 and include 545 total products valued at $34 billion. The affected products are mostly agricultural (fruits, vegetables, nuts, rice, seafood, wheat, dairy products, corn), as well as motor vehicles and tubes and pipes made of iron or steel. The start date for Schedule II of China's tariff plan and the products that it will cover have yet to be announced.
If your company’s production process is significantly impacted by the tariffs imposed on imports from China, you have the opportunity to request an exclusion from the United States Trade Representative. Requests must be submitted by October 9 to be considered.
Canada imposed new tariffs as of July 1 of 10 to 25 percent depending on the product category. The first category of products primarily features industrial materials made of steel and is subjected to a 25 percent tariff rate. The second category consists of products made of aluminum and is subject to a 10 percent tariff. The third and final category is also subject to a 10 percent tariff and includes a variety of goods such as agricultural products (coffee, sauces, sugar, water) and household articles (kitchen appliances, bedroom furniture and toiletries).
Mexico’s latest round of tariffs range from 15 to 25 percent and target iron, steel, and agricultural products. The tariffs went into effect early June. Products impacted include steel and iron construction materials and furniture, cheeses and pork.
Have questions or concerns?
We remain committed to helping you make sense of these new tariffs and how they will impact your company. If you have any doubts or concerns about what these tariffs mean for your business, please reach out to Nate Ward, director of the SBDC EAN at email@example.com or 216.687.7347. We are available to field questions by e-mail or to meet with you for counseling.
Additionally, we offer periodic export training sessions that will address customs concerns. Our upcoming GlobalReach event on August 23rd focusing on food exports is a great opportunity to have access to a specialist in that industry from the Food Export Association of the Midwest. We hope to see you there!