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Fabricated Structural Steel Considered for Section 301 Tariff List

Last Friday, the Office of the United States Trade Representative (USTR) released a list of products imported from China that will be subject to additional tariffs as part of the U.S. response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property. Fabricated structural steel was added for consideration to the Section 301 tariff list due in part to AISC’s advocacy and testimony at last month’s USTR Section 301 public hearing in Washington, D.C.

The list of products covers more than 1,000 separate U.S. tariff lines valued at approximately $50 billion in 2018 trade values.

The tariff list is separated into two separate groups:

1. USTR has determined to impose an additional duty of 25% on the first list of products valued at approximately $34 billion after having sought and received views from the public and advice from the appropriate trade advisory committees. Customs and Border Protection will begin to collect the additional duties on July 6, 2018.

2. The second set of proposed tariff lines, including those related to fabricated structural steel, have been identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the "Made in China 2025" industrial policy. The second set, which cover approximately $16 billion worth of imports from China, will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties.

AISC’s Involvement

On May 15, 2018, Jeffrey Sterner, president and chief operating officer of High Industries, Lancaster, Pa. (an AISC member and certified fabricator and erector), and a member of the AISC board of directors, testified on behalf of AISC in front of the United States Trade Representative Section 301 committee, and asked that the administration add fabricated structural steel to the Section 301 tariff list.

In his testimony, Sterner said, "Steel assemblies that fall under these two [tariff] codes represented $831 million of imports in 2017, or nearly 2% of the Section 301 target value. Adding these codes is critically important because the U.S. structural steel supply chain currently suffers from the effects of unfair Chinese industrial policies related to steel production and fabrication."

The originally proposed Section 301 schedule already included 132 HTS codes related to steel, many of which represented products used in the construction industry. However, the original list did not close the circumvention loophole left open by the Section 232 order which does not currently include the codes for fabricated steel assemblies.

"Adding fabricated steel assemblies under HTS codes 730810 and 730890 would be a logical extension of other tariffs already in the proposed Section 301 schedule in addition to those in the Section 232 Order," said Brian Raff, AISC’s director of government affairs. "It will add real teeth to the effort to curb China’s policies and practices that adversely impact domestic steel fabrication and production."

View Sterner’s testimony here.

Charlie Carter, AISC's president, remarks, "We have been talking with the several trade-related agencies for more than a year now, and we're pleased to know that leadership within these agencies is paying careful attention. Adding fabricated structural steel to the 301 tariff list is a step in the right direction and we hope that the Department of Commerce follows suit and closes the circumvention loophole that currently exists in the Administration's signature trade policy by allowing foreign fabricated structural steel into the U.S. without penalty."

AISC has also been an active participant in the 232 investigation on steel imports, testifying at the Commerce Department hearing in May 2017, submitting post-hearing information to Commerce and writing letters to the President. Our primary argument has been that the critical tie between steel imports and national security is in America’s Critical Infrastructure -- an argument that was adopted by and featured prominently in the Commerce Department Report. However, as the implementing Order was being finalized, we urged one critically important modification to the Commerce report: Include fabricated structural steel in the products covered by the tariff.


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