On May 17, 2019, the President of the United States issued a proclamation directing the United States Trade Representative (USTR) to pursue negotiations with the European Union, Japan and any other country the Trade Representative deems appropriate in order to address the threat to U.S. national security identified by the U.S. Department of Commerce (DOC) Secretary. A decision to impose new tariffs on imports of automobiles and auto parts will be delayed for 180 days while the USTR pursues these negotiations.

USTR, Robert Lighthizer, will lead the negotiation process and must report back to the President by November 13, 2019 (180 days). Per a statement released by the administration, “ … if agreements are not reached within 180 days, the President will determine whether and what further action needs to be taken.”

The proclamation also considered the impact of the renegotiated United States-Korean Free Trade Agreement and the recently signed United States, Mexico, Canada Agreement (USMCA), which, when implemented, could help to address the threatened impairment of the national security found by the DOC.

Background:

In May 2018, the DOC initiated an investigation under Section 232 of the Trade Expansion Act of 1962 to determine if automobile and auto parts are being imported in such quantities or under circumstances which threaten or impair U.S. national security.

The DOC presented their findings in a report to the President on February 17, 2019. According to the recent proclamation, the report concluded that the present quantities and circumstances of imports of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans and cargo vans) and light trucks and certain auto parts (engines and engine parts, transmissions and powertrain parts, and electrical components) do threaten to impair national security. In light of the findings, the Secretary recommended action to adjust automotive imports so they will not threaten to impair national security, including a recommendation to pursue negotiations which, if successful, could allow American-owned automobile producers to achieve long-term economic viability. Following the presentation of the findings by the DOC, the President was to review the report and make his decision by May 18, 2019 (90 days) regarding further action.

For more information, please contact your local MIQ Logistics, a company of Noatum Logistics representative.