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Updates concerning Measures by and against the U.S.
Executive Orders issued by the U.S. to impose tariffs on imports from Mexico and Canada, and subsequent suspension thereof (01 Feb)
On 1st February 2025, President Trump issued an Executive Order1 , subjecting all articles that are produced in Mexico, to an additional ad valorem duty of 25%. A similar Order was also issued for the imports from Canada, in which case the Executive Order2 imposed an additional ad valorem duty of 25% on imports of all articles that are produced in Canada, barring products relating to energy or energy sources. For products relating to energy or energy sources, an additional 10% duty shall apply.
The additional duty applies to all goods that entered for consumption or were withdrawn from warehouse for consumption, on or after 4th February 2025. However, goods that were already in transit before 1st February 2025 would not be subject to such duty. The Order further clarified that no drawback would be available in respect of duties paid under such Order, and such imports would not be subjected to duty-free de minimis treatment under the law
In the concerned Orders, the President cited national emergency caused by failure of Canada and Mexico to deter the influx of gang members, smugglers, human traffickers, and illicit drugs into the U.S., as a justification warranting imposition of the measures.
However, on 3rd February 2025, President Trump issued two more Orders3 , stating that Mexico and Canada had taken immediate steps to alleviate the illegal migration and illicit drug crisis through cooperative actions. In order to allow time to assess whether such steps were sufficient, the additional ad valorem duty applied on products of Canada and Mexico would be suspended till 4th March 2025.
Retaliatory measures invoked by Canada (01 Feb)
In response to the measures invoked by the U.S., Canada issued an Order4 , notifying additional ad valorem duty of 25% on goods originating in the U.S., on imports under the prescribed tariff schedule. The duties were to come into force on 4th February 2025, barring on goods that were in transit to Canada during the day on which the Order came into force.
Executive order by the U.S. to impose tariffs on imports from China (01 Feb)
On 1st February, President Trump also issued an Executive Order5 , subjecting all articles that are products of China, to an additional ad valorem duty of 10%. Such tariff is in addition to the tariffs earlier imposed on imports from China under Section 301, in 2018. As in the case of other Orders, additional duty applies to all goods that entered for consumption or were withdrawn from warehouse for consumption, on or after 4th February 2025. The Order further clarified that no drawback would be available in respect of duties paid under such Order, and such imports would not be subjected to duty-free de minimis treatment under the law. However, the Order was amended subsequently6 , to allow duty-free de minimis treatment, till such time as adequate systems are put in place to collect tariffs.
In its Order, the President cited national emergency resulting from influx of illicit drugs from China, along with the latter providing support to transnational criminal organizations, as a justification for the measures. The Order further states that in case China retaliates against the U.S. in response to additional duties, the President may increase or expand the scope of the duties imposed under the Order to ensure its efficacy
China announces multiple tariff and non-tariff measures in retaliation to targeted tariffs imposed by the U.S. (04 Feb)China announces multiple tariff and non-tariff measures in retaliation to targeted tariffs imposed by the U.S. (04 Feb)
China has announced multiple measures on the U.S., both tariff and non-tariff, with effect from 10th February 2025, in retaliation to the recent measures imposed by the U.S. Duties to the tune of 15% have been announced on coal and liquified natural gas imports and an additional duty of 10% has been announced on U.S. imports of crude oil, various types of agricultural machinery, tractors, largedisplacement vehicles and pickup trucks, electric wagons, agricultural trailers, and semi-trailers, falling under 72 tariff lines. The MOFCOM has also announced immediate export controls on critical metals such as tungsten, tellurium, bismuth, molybdenum, and indium which are used in industrial and defence applications, solar cell manufacturing and the semi-conductor industry. Several other actions against U.S. companies is also likely to be initiated
Request for consultations by China regarding measures invoked by the U.S. (05 Feb)
China has also requested WTO dispute consultations with the U.S. in light of the additional tariffs on goods originating in China. China has claimed that the additional duties applied on all goods originating in China, as well as measures with respect to the availability of drawback and duty-free de minimis treatment, are inconsistent with the obligations of the U.S. under the GATT. China contends that the measures do not allow the same advantage or status with respect to customs duties to China, as are imposed on imports of products originating in the territory of other WTO members. Further, the additional duties imposed are in excess of the bound rates of tariff, which the U.S. agreed to, in the Schedule of Concessions and Commitments under the GATT.
Additional measures imposed by the U.S. on imports of Steel and Aluminium articles and derivatives thereof (10 Feb)
On 10th February 2025, President Trump issued a Proclamation imposing a 25% ad valorem tariff on imports of Steel and articles and derivatives thereof7 from all sources, and Aluminium and articles and derivatives thereof8 from all sources, except Russia. However, any derivative aluminium articles, where any amount of primary aluminium used in the manufacture was smelted in Russia, shall be subject to the 200% ad valorem duty
The duty shall be imposed on products imported under the prescribed tariff classifications. The measures were claimed to have been imposed in view of imports in such quantities and under such circumstances that are threatening to impair the national security of the U.S. However, no additional duty shall be imposed on steel derivatives processed in another country from steel articles that were melted and poured in the U.S.
The Proclamations withdraw previously granted General Approved Exclusions as well as country-specific exemptions for Canada, Mexico, Australia, and Ukraine from the existing Section 232 duties and remove quotas on imports from Argentina, Brazil, and South Korea. Further, the European Union, the United Kingdom, and Japan will no longer be accorded tariff-rate quota regimes.
Executive Order issued to initiate a Section 232 investigation against imports of Copper (25 Feb)
Pursuant to Executive Order dated 25th February 20259 , President Trump directed the Secretary of Commerce to initiate a Section 232 investigation into imports of Copper, in all its forms. The investigation is intended to assess the national security risks arising from the increased dependence on imported Copper, and the potential need for trade remedies to safeguard domestic industry
Global Updates
WTO Panel report issued regarding US duties on fish fillets from Vietnam (05 Feb)
The WTO has circulated the Panel Report in the dispute "United States — AntiDumping Measures on Fish Fillets from Vietnam". On 17th January 2025, both the parties notified the Dispute Settlement Body that they had reached a mutually agreed solution to the matter after which the U.S. Department of Commerce issued a notice excluding merchandise produced and exported by Vinh Hoan from the anti-dumping duty order. The Panel has noted the mutually agreed solution between the parties to the dispute and accordingly concluded its work.
Somalia starts its WTO accession process (17 Feb)
The first meeting of the Working Party on the accession of Somalia took place on 17th February 2025 where the country committed to advance its accession process to become a member of the WTO. Somalia's Deputy Prime Minister Salah Ahmed Jama has shown its determination to align its trade policies with global trade standards and achieve sustainable economic growth. The Chair of the Working Party on the Accession of Somalia aims to conduct the next Working Party meeting by the end of 2025 and requested submission of comprehensive inputs from Somalia before the next meeting.
Footnotes
1 Executive Order: Imposing Duties to Address the Situation at the Southern Border, available at link herein.
2 Executive Order: Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border available at link herein.
3 Executive Order: Progress on the Situation At Our Southern Border, available at link herein and Executive Order: Progress on the Situation At Our Northern Border, available at link herein.
4 Orders by Council available at link herein.
5 Executive Order: Imposing Duties to Address the Synthetic Opioid Supply Chain in the People's Republic of China, available at link herein.
6 Executive Order: Amendment to Duties Addressing the Synthetic Opioid Supply Chain in the People's Republic Of China, available at link herein.
7 Proclamation: Adjusting Imports of Steel into The United States available at link herein.
8 Proclamation: Adjusting Imports of Aluminium into The United States available at link herein
9 Executive Order: Threat to National Security from Imports of Copper available at link herein.
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