The U.S. fastener industry breathed a collective sigh of relief when steel and iron nuts (HS code 73181600) were excluded from a list of Chinese products subject to a 25% tariff by the Trump administration under Section 301 of the Trade Act of 1974.

The Office of the United States Trade Representative (USTR) released a revised list of products imported from China that will be subject to additional tariffs as part of the U.S. response to China’s trade practices related to technology and intellectual property.

The list of products covers 1,102 separate U.S. tariff lines that include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles, according to USTR.

Implementation of the “301” tariffs follows a trade threat made by President Donald Trump in March. The threat prompted negotiations between the world’s two largest economies, but China indicated that any deals made during that time are now nullified.

“The United States has kept changing its mind and now launched a trade war,” China’s Commerce Ministry said in a statement. “We will immediately launch tariff measures that will match the scale and intensity of those launched by the United States.”

Starting July 6, Beijing reportedly will impose tariffs on 545 U.S. items worth $34 billion on agricultural products, automobiles and seafood. Tariffs on an additional 114 items will start some time after that.

The U.S. fastener industry is already grappling with uncertainties surrounding the 25% tariff on steel imports and 10% tariff on aluminum imports that Trump abruptly announced in March. The metals tariffs are often referred to as “232” tariffs because the applicable metals have been deemed to “threaten to impair the national security,” as defined by Section 232 of the Trade Expansion Act of 1962.

The White House initially issued temporary exemptions for such U.S. allies as Canada, Mexico, and European Union countries while those countries attempted to negotiate long-term arrangements with the U.S. But those talks failed, prompting the Trump administration to begin enforcing the metals tariffs on June 1.

The Industrial Fasteners Institute’s Washington representative Jennifer Baker Reid told GlobalFastenerNews.com that U.S. fastener manufacturers are bracing for the fallout from the 232 tariffs.

“If you’re a U.S. fastener manufacturer and get your steel from Canada or Europe, you’re price (went) up 25% (immediately),” Reid told GlobalFastenerNews.com.

“Raw material prices and lead times were already increasing (25%-40%). This will make matters worse. If you don’t buy steel domestically, you buy from Canada or the EU.”

Canada, Mexico and the EU have all pledged retaliatory tariffs on U.S. products.

“If you export fasteners and your HTF is on that list, you’re going to face immediate tariffs,” Reid noted.


Exclusion Process ‘Broken’
U.S. fastener manufacturers have been applying for product exclusions from the Commerce Department.

So far, more than 21,000 exclusions requests from 300 companies have been filed, though only several hundred have been made available for public comment. Once public, domestic steel manufacturers have 30 days to file an objection.

Reid said the Commerce Department was already overwhelmed by the exclusion requests, which will only increase now that the 232 tariffs apply to Canada, Mexico, and the EU. Commerce Department officials expect the number of applications to reach 40,000.

“The process is broken, it has been overloaded, and that is only going to get worse,” Reid told GlobalFastenerNews.com.

So far, no IFI members have received exclusions, those some have applied for them.

Meanwhile, domestic steel prices will continue to rise while Commerce grapples with an administrative process that requires companies to file a separate request for each product they want excluded from the tariffs.


Industry Advocacy Continues
For more than a year, the IFI has been trying to convince the Trump administration against implementing steel and aluminum tariffs, which ultimately were rationalized after the Commerce Department reported that steel and aluminum imports “threaten to impair the national security,” as defined by Section 232 of the Trade Expansion Act of 1962.

The IFI is part of the Coalition of American Metal Manufacturers and Users, which opposes the 232 tariffs under the slogan,“Tariffs are Taxes.”

“We are deeply disappointed that the Trump Administration has decided to move forward with imposing steel and aluminum tariffs on the EU, Canada, and Mexico, the coalition stated just after the exemptions for allied countries ended. “Make no mistake: restricting the raw material supply in the U.S. and imposing tariffs on imports from our closest trading partners places American manufacturers directly in harm’s way.” 

The last time the U.S. imposed steel tariffs in 2002, more than 200,000 manufacturing jobs were lost.  The consequences of these 232 steel tariffs could be even worse for U.S. companies as the 2002 tariffs were not applied to Canada and Mexico.

The tariffs particularly impact small and medium sized companies who will lose business to their overseas competitors. 

“Our members are also reporting concerns over their own exports as their overseas customers shift to non-U.S. suppliers who do not face government restrictions on steel and aluminum,” the coalition stated. “And when a customer removes you from their supply chain, especially for smaller, family-owned businesses, it is tough to bring that work back to the U.S.” 

Reid said the IFI will continue to work with Trump administration and Congress to talk about the impact of tariffs on its members.

“Education and advocacy are things we can continue.”

But she pointed out that unlike the 2002 tariffs, the 232 process doesn’t have a time limit, which places it totally at the President’s discretion.

“This administration is very hard to predict,” Reid stated. Web: Indfast.org