06222018What's Hot:

What happens after Trump signs tariffs order

President Donald Trump is preparing sign a document proclaiming new tariffs on steel and aluminum. | Carolyn Kaster/AP Photo

Questions remain about which countries will be exempt and how U.S. companies and importers can ask to be excluded from the tariffs.

Putting tariffs in place can be as easy as the stroke of the pen. It’s setting the policy — and any exceptions to it — that’s the hard part.

As President Donald Trump gets ready to sign a document Thursday proclaiming new tariffs on steel and aluminum, the country has a well-trained system in place to carry out his wishes.

Story Continued Below

The trickier question is which countries will be exempt, as well as how his administration will allow U.S. companies and importers to request exclusions for necessary products.

As of early Wednesday evening, the details of the final announcement were still being worked out, according to a person briefed on the internal debate.

Trump’s order will likely direct the U.S. International Trade Commission, an independent federal agency, to publish the updated tariff schedules, which are expected to be 25 percent on steel and 10 percent on aluminum. Customs and Border Protection is responsible for collecting them.

It’s all the other questions that businesses are wondering about: How will the tariffs — which are expected to be done in the name of national security — apply to some of the U.S.’ closest allies? Will the tariffs apply to goods already in transit? And how will the U.S. monitor finished products that may include steel from problematic sources like China?

White House spokeswoman Sarah Huckabee Sanders indicated Wednesday there could be exemptions for Canada and Mexico “based on national security, and possibly other countries as well.” That could blunt some of the sting on U.S. companies that use steel and aluminum.

Other countries that have free trade agreements with the U.S. could still get stuck with the tariffs even if their deals call for an elimination of duties on steel and aluminum. An industry source said every U.S. trade agreement includes a national security exception that would allow the Trump administration to apply the new tariffs to any country it wants.

Countries could challenge the tariffs at the World Trade Organization, saying that they violate trade laws. That process could authorize retaliatory tariffs, penalties or other remedies. But the dispute process on the international level takes many months and even years. A case in which the U.S. will invoke its national security exception is also tricky because the WTO may not want to question a member-nation’s sovereignty.

The administration is also expected to put in place ways U.S. companies and importers can request exemptions for specific products, but supporters of the tariffs warn against expecting that to be simple.

“To the extent that there is an exclusion process, it should be transparent, it should be tight, and it shouldn’t be carried out in a way that creates and refills the Washington swamp rather than drains it,” Scott Paul, president of the Alliance for American Manufacturing, said during a call with reporters Wednesday defending Trump’s proposed tariffs.

If past actions to raise tariffs are any guide, there are a few ways that could shake out.

The Commerce Department, which authored the reports establishing that imports of steel and aluminum represented a national security threat, will likely take charge of a process for considering that certain products should be excluded from the tariffs.

A similar process was put in place after Trump signed a pair of actions in January that imposed tariffs and other trade restrictions on imports of washing machines and solar panels. (Those tariffs and quotas were through a different law, which left the Office of the U.S. Trade Representative, in the case of solar imports, in charge of an exclusion process that would include input from the Commerce and Energy departments.)

A worker loads steel products onto a vehicle at a steel market in Fuyang is pictured. | AP Photo

But regardless of the agency overseeing the requests, any exclusion would be subject to a dozen criteria — such as whether there were a U.S. producer for the product or an equivalent substitute.

“There will be a process whereby people can apply for an exclusion by product, but they are going to have to make a very strong case that says this is not available here and can’t be made available here in a relatively short period of time,” Dan DiMicco, a former steel executive and trade campaign adviser to Trump, said during the same call with reporters Wednesday.

Even with exceptions, tariff opponents say small- and medium-size businesses will bear the brunt of the increased costs because they are unable to muster the resources to go through the process.

“The whole idea of being able to get a waiver or apply for a waiver, to me this is an additional government regulation,” said Dan Eberhart, CEO of Canary, one of the largest private oilfield services companies in the United States. “We’re a medium-sized business. More regulations are not what I’m looking for.”

Eberhart’s company imports steel to manufacture pressure control equipment for oil drilling. He said a 25 percent tariff could force him to move up to 50 jobs to China to keep costs low and stay competitive in the energy boom currently happening in the U.S.

“Our costs are going to go up,” he said.

Andrew Restuccia contributed to this report.

This article tagged under:

Missing out on the latest scoops? Sign up for POLITICO Playbook and get the latest news, every morning — in your inbox.

Source: POLITICO – TOP Stories

comments powered by HyperComments

More on the topic