Charles Clevenger, principal with the national advisory and accounting firm UHY, brings us up to date on the raft of tariffs imposed by the Trump Administration.
President Trump’s previous tariffs that were imposed under section 122 of the Trade Act of 1974 expired on July 24, having reached their statutory 150-day limit. But Trump quickly announced new tariffs to take their place.
One major action is a set of tariffs under section 301 of the Trade Act of 1974, in response to what Trump claims is inadequate policies by U.S. trading partners against forced labor in China and elsewhere. They were hit with an average 10% tariff, while nations alleged to be directly engaged in forced labor were punished with one at 12.5%. More than 60 countries are affected by the tariffs, Clevenger says.
In addition, Trump has evoked section 338 of the Trade Act of 1930, known familiarly as the Smoot-Hawley Act, to impose a 50% tariff on a select number of imports from Canada. And tariffs of between 25% and 50% on imports of steel, aluminum and copper, levied under the authority of section 232 of the Trade Expansion Act of 1962, remain in effect.
Still unknown are the full ramifications of Trump’s decision not to pursue renewal of the United States-Mexico-Canada (USMCA) treaty. Ultimately, that could lead to additional tariffs on goods from Mexico and Canada, but Clevenger says any such impact won’t be felt for several years, while the agreement is still in effect.
Over the last 40 years, U.S. manufacturers have evolved from operating domestic supply chains to those across North America and, ultimately, the world. In light of the recent tariffs, Clevenger says, they would do well to reestablish domestic sourcing as a means of avoiding the taxes and creating more reliable supply chains. “There’s a manufacturing philosophy I like,” he says, “Make where you sell, and buy where you make.”