{ "id": "IN10971", "type": "CRS Insight", "typeId": "INSIGHTS", "number": "IN10971", "active": true, "source": "EveryCRSReport.com, CRSReports.Congress.gov", "versions": [ { "source": "EveryCRSReport.com", "id": 615189, "date": "2020-01-29", "retrieved": "2020-01-30T23:02:03.524581", "title": "Escalating U.S. Tariffs: Affected Trade", "summary": "The trade practices of U.S. trading partners and the U.S. trade deficit are a focus of the Trump Administration. Citing these and other concerns, the President has imposed tariff increases under three U.S. laws:\n(1) Section 201 of the Trade Act of 1974 on U.S. imports of washing machines and solar products, due to concerns over their injurious effects on domestic U.S. industry; \n(2) Section 232 of the Trade Expansion Act of 1962 on U.S. imports of steel and aluminum, and potentially motor vehicles and titanium sponge, due to concerns that imports threaten to impair the national security; and \n(3) Section 301 of the Trade Act of 1974 on U.S. imports from China, due to concerns over intellectual property rights and other practices, on U.S. imports from the European Union (EU) due to concerns over subsidies on the manufacture of large civil aircraft, and potentially on U.S. imports from France due to concerns over its digital services tax (DST). \nIn May 2019, in response to concerns over immigration, the President also proposed an additional 5% tariff on imports from Mexico under the International Emergency Economic Powers Act (IEEPA), but subsequently suspended such action. This product focuses on unilateral U.S. tariff actions, and does not include Section 301 tariffs related to the large civil aircraft dispute with the EU, which were authorized by a WTO dispute settlement panel. For a timeline of recent actions, see CRS Insight IN10943, Escalating U.S. Tariffs: Timeline. The Administration has stated that it is using existing and proposed tariffs for a range of purposes, including as leverage for trade negotiations. While tariffs may benefit some import-competing firms, they also increase costs for downstream users of imported products and consumers, and may have broader negative economic effects and other policy implications.\nThe multiple tariff increases to date, ranging from 10% to 45%, affect approximately 16% of U.S. annual imports. This amounts to $396.4 billion of imports (2018 data), with Section 301 tariffs on U.S. imports from China accounting for more than 90% of the trade affected (Figure 1). While the Administration has taken some steps to reduce the scale of imports affected (i.e., by exempting Canada and Mexico from the steel and aluminum duties and excluding certain products), the general trend has been an escalation of tariff actions. For example, in May 2019, the Administration increased Section 301 tariffs on nearly $200 billion of imports from China (stage 3), from 15% to 25%, and in September, imposed new tariffs of 15% on an additional $126 billion in Chinese imports (stage 4A). Even in light of the newly signed U.S.-China \u201cphase one\u201d trade agreement, the majority of tariff increases remain in place (see below). \nThe Administration has proposed other actions that would expand the share of U.S. trade potentially affected. The President has declared U.S. motor vehicle imports, particularly from the EU and Japan, a national security threat under Section 232, granting him the authority to impose tariff increases on such imports, and has proposed up to 100% tariffs on select French goods, after a Section 301 investigation into France\u2019s digital services tax. The President has also proposed, but now indefinitely suspended, an additional 5% to 25% tariff on all imports from Mexico, as well as tariffs on the remaining $156 billion of imports from China, mostly consumer goods, not yet affected by Section 301 duties (stage 4B). The President has also issued a proclamation, effective February 8, 2020, expanding the scope of the steel and aluminum tariffs to include certain derivative products, such as nails or certain car parts. In total, these proposed actions, together with those already implemented, would potentially affect over $1 trillion or 40% of U.S. annual imports.\nThree recent events, however, suggest a potential reduction to the threat of further escalation. On January 15, 2020, the Administration signed a phase one trade deal with China, with the intent of resolving some of the trade and investment issues of concern. Leading up to this agreement, the United States announced its intent to reduce stage 4A tariffs on imports from China from 15% to 7.5%, and both sides suspended proposed tariff increases planned for December 2019. While the agreement does not commit either side to reduce tariffs further, it requires China to purchase $200 billion of additional U.S. exports over two years, which may involve product-specific tariff exemptions. Also in January, the \"stage one\" U.S. trade agreements with Japan entered into force, which do not directly address auto trade but likely lessen the prospect of new tariffs on U.S. auto imports from Japan. Most recently, news reports suggest a temporary pause to the dispute between the United States and France, as France postponed implementation of its digital services tax.\nFigure 1. Trump Administration Tariffs and Affected Trade\n/\nSources: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas.\nNotes: Based on annual 2018 import values. Excludes exempted countries. Motor vehicle and parts import figure includes only U.S. imports from the European Union and Japan, which were the focus of the President\u2019s proclamation declaring motor vehicle imports a national security threat. Tariff-rate quotas (TRQs) are a form of import restriction in which one tariff applies up to a specific quantity or value of imports and a higher tariff applies above that threshold.\nAs tariffs act as a tax on foreign-produced goods, they distort price signals, potentially leading to less efficient consumption and production patterns, which may ultimately reduce growth rates. As of January 23, 2020, the United States collected $54 billion from the additional taxes paid by U.S. importers, according to U.S. Customs and Border Protection. These taxes have had a negative aggregate effect on the U.S. manufacturing sector with increased input costs offsetting the gains from increased protection, according to preliminary analysis from researchers at the U.S. Federal Reserve Board. Increasing tariffs also creates greater economic uncertainty, potentially dampening business investment and creating a further drag on growth. Preliminary research, for example, suggests the increase in trade policy uncertainty may have reduced aggregate U.S. investment by 1% or more in 2018. Estimates of the tariffs\u2019 overall economic effects vary, depending on modeling assumptions and the specific set of tariffs considered. Most studies, however, predict declines in GDP growth: the Congressional Budget Office estimated that the tariffs currently in effect would lower U.S. GDP by 0.5% in 2020, below a baseline without the tariffs, while raising consumer prices by 0.5%, thereby reducing average real household income by $1,277. From a global perspective, the IMF estimated that the tariffs would reduce global GDP in 2020 by 0.8%.\nRetaliation amplifies the potential negative effects of the U.S. tariff measures. It broadens the scope of U.S. industries potentially harmed, by making targeted U.S. exports less competitive in foreign markets. U.S. exports of targeted industries have declined, with U.S. agricultural exports subject to retaliation down 27% in 2018, compared to 2017. Some U.S. manufacturers are shifting production to other countries to avoid the tariffs on U.S. exports. Retaliatory tariffs in place in response to both Section 232 and Section 301 actions, cover approximately $97.5 billion of U.S. annual exports (2018 data (Table 1)). If China follows through with its purchase commitments in the phase one deal, it could lessen or reverse the export declines related to the impact of the retaliatory tariffs for certain industries. China, like the United States has also granted limited tariff exclusions, lessening somewhat the scale of U.S. exports affected.\nTable 1. Retaliatory Actions in Effect\nRetaliatory Trade Action\nAffected U.S. Exports (millions, 2018)\nAdditional Tariff\nEffective Date\n\nSection 232\nEU\n$2,890 \n10-25%\nJune 25, 2018\n\n\nChina\n$2,522 \n15-25%\nApr. 2, 2018\n\n\nTurkey\n$1,771 \n4-70%\nJune 21, 2018\n\n\nIndiaa\n$1,392\n10-50% \nJune 16, 2019\n\n\nRussiab\n$431\n25-40%\nAug. 6, 2018c\n\n\nTotal Exports Affected by Section 232 Retaliation\n$9,006\n\n\n\nSection 301\nChina\u2014Stage 1c\n$12,896\n25%\nJuly 6, 2018\n\n\nChina\u2014Stage 2c\n$11,595\n25%\nAug. 23, 2018\n\n\nChina\u2014Stage 3c,d\n$59,700\n5-10%/\n 5-25%\nSept. 24, 2018/ \nJune 1, 2019\n\n\nChina\u2014Stage 4Ae\n$25,463\n5-10%\nSept. 1, 2019\n\n\nChina\u2014Stage 4Be (proposed)\n$41,791\n5-10%\nsuspended\n\n\nChina\u2014Reinstated Auto Tariffs (proposed)\n$11,720\n5-25%\nsuspended\n\n\nTotal Exports Affected by Section 301 Retaliationf\n$91,055\n\n\n\n\nTotal and Proposed Exports Affected by Section 301 Retaliationf\n$106,122\n\n\n\nOverall Total Exports Affected by Retaliationg\n$97,539\n\n\n\nOverall Total and Proposed Exports Affected by Retaliationg\n$112,606\n\n\n\nSources: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications.\nNotes: Canada and Mexico withdrew their retaliation after the Trump Administration exempted both countries from the Section 232 duties.\nIndia\u2019s retaliatory tariffs were announced in June 2018, with tariffs ranging from 10%-50%, but were repeatedly postponed. India\u2019s latest announcement appears to remove 2 of the 30 products from its initial list and may affect retaliatory tariff rates.\nRussia published its list of retaliatory tariff rates and products on July 6, 2018, which appear to have gone into effect within 30 days of publication.\nExport calculation excludes auto tariffs suspended indefinitely.\nChina\u2019s retaliatory tariffs in response to U.S. stage 3 Section 301 tariffs initially ranged from 5-10%. In response to the Administration\u2019s increase of Section 301 stage 3 tariffs to 25% on May 10, China increased its retaliatory tariffs on certain products to 20% and 25%.\nChina\u2019s Stage 4 retaliation includes tariffs on new products and increases tariff rates on other products already subject to retaliatory tariffs. Stage 4B tariffs were originally scheduled to go into effect on December 15, 2019, but were suspended in advance of the U.S.-China phase one agreement.\nTotal exports adjusted to account for tariff lines affected by multiple stages of China\u2019s retaliation to Section 301 tariffs.\nTotal exports adjusted to account for tariff lines affected by China\u2019s retaliation to both Section 232 and Section 301 tariffs.\nMany Members of Congress, U.S. businesses, interest groups, and trade partners have weighed in on the President\u2019s actions. While some U.S. stakeholders support the use of unilateral trade actions to level the playing field for U.S. firms, many have raised concerns, including the chair of the Senate Finance Committee, who stated that the President\u2019s proposed tariffs on Mexico, for example, are a \u201cmisuse of presidential tariff authority.\u201d Several Members have introduced legislation that would constrain the President\u2019s authority (e.g., H.R. 723, S. 287, S. 365, and S. 899), while other Members and the Administration have advocated for increasing this authority (e.g., H.R. 764). As debates continue, Congress may consider the following:\nDelegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Members of Congress have sought clarification on the Administration\u2019s Section 232 investigation process, and some take issue with the President\u2019s refusal, based on a Justice Department determination, to publicly release the Section 232 report on motor vehicles, despite legislation to that effect. Are additional congressional checks on the Administration\u2019s discretion necessary? \nEconomic Implications and Escalation. The Administration\u2019s tariffs imposed to date cover 16% of annual U.S. goods imports; proposed tariffs could potentially increase this to 40%. Negative effects of the tariffs may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. Most studies suggest the tariffs now in effect will reduce U.S. and global economic growth. What are the Administration\u2019s ultimate objectives from the tariff increases and do potential benefits justify potential costs?\nInternational Trading System and U.S. Foreign Relations. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, including at the World Trade Organization (WTO), U.S. trading partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings, arguing that retaliatory countermeasures violate trade agreement obligations. What are the risks to the international trading system and to broader U.S. foreign policy goals of continued unilateral action and economic confrontation?", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN10971", "sha1": "ded31c02b084b3e9e630d678479669a242fc5624", "filename": "files/20200129_IN10971_ded31c02b084b3e9e630d678479669a242fc5624.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10971_files&id=/0.png": "files/20200129_IN10971_images_97501fba7cf60599a755e7d1bb29c8f480b1bfc9.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN10971", "sha1": "9391414708a737956f7f672023160073e9ed1e70", "filename": "files/20200129_IN10971_9391414708a737956f7f672023160073e9ed1e70.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4865, "name": "Import Policy" } ] }, { "source": "EveryCRSReport.com", "id": 606621, "date": "2019-10-24", "retrieved": "2019-10-24T22:03:08.808584", "title": "Escalating U.S. Tariffs: Affected Trade", "summary": "The trade practices of U.S. trading partners and the U.S. trade deficit are a focus of the Trump Administration. Citing these and other concerns, the President has imposed unilateral tariff increases under three U.S. laws:\n(1) Section 201 of the Trade Act of 1974 on U.S. imports of washing machines and solar products; \n(2) Section 232 of the Trade Expansion Act of 1962 on U.S. imports of steel and aluminum, and potentially motor vehicles/parts and titanium sponge (the President decided not to impose tariffs on uranium imports, after an investigation); and \n(3) Section 301 of the Trade Act of 1974 on U.S. imports from China. \nIn May 2019, in response to concerns over immigration, the President also proposed an additional 5% tariff on imports from Mexico under the International Emergency Economic Powers Act (IEEPA), but subsequently suspended the proposed tariffs indefinitely citing an agreement reached with Mexico. This product focuses on unilateral tariff actions by the Administration, and does not include recently imposed increased tariffs on U.S. imports from the European Union (EU), which were sanctioned by a WTO dispute settlement panel. For a timeline of recent actions, see CRS Insight IN10943, Escalating U.S. Tariffs: Timeline. The Administration has stated that it is using existing and proposed tariffs for a range of purposes, including as leverage for trade negotiations with affected trading partners, such as China, Japan, and the EU, and, as noted, to influence Mexico\u2019s immigration policies. While tariffs may benefit a limited number of import-competing firms, they also increase costs for downstream users of imported products and consumers and may have broader negative effects on the U.S. economy, as well as several policy implications.\nThe multiple tariff increases applied to date, ranging from 10% to 45%, affect approximately 16% of U.S. annual imports. This amounts to $396.4 billion of imports using 2018 annual data; notably, the tariffs went into effect at various times in 2018 and 2019 (Figure 1). Section 301 tariffs on U.S. imports from China account for more than 90% of trade affected by the Administration\u2019s tariff actions. While the Administration has taken some steps to reduce the scale of imports affected by the tariffs (i.e., by exempting Canada and Mexico from the steel and aluminum duties and creating processes by which certain products may be excluded), the general trend has been an escalation of tariff actions. \nIn the spring and summer of 2019, the Administration implemented and proposed a series of additional tariff actions, significantly expanding the share of U.S. trade potentially affected. Since May, the Administration has escalated its Section 301 tariffs on China by increasing stage 3 tariffs on Chinese goods from 10% to 25%, such that $238 billion of annual U.S. imports from China now face an additional 25% tariff, and announcing plans for additional stage 4 tariffs of 15% covering nearly all remaining bilateral imports (Figure 1). The first phase of stage 4 tariffs took effect on September 1, and the second phase (stage 4B), which covers mostly consumer goods, is to take effect on December 15. In response to this escalation, China also increased its stage 3 tariffs, imposed Stage 4A retaliatory tariffs of 5-10% on September 1, and is to impose additional stage 4B tariffs of 5-10% on December 15, as well as reinstate suspended auto tariffs. In addition to these actions affecting trade with China, in May, President Trump declared U.S. motor vehicle imports, particularly from the EU and Japan, a national security threat under Section 232, granting him authority to impose tariff increases on such imports. (U.S. auto and parts imports from the EU and Japan totaled $119.0 billion in 2018.) The President also proposed an additional 5% to 25% tariff on all imports from Mexico (now indefinitely suspended). In total, these proposed actions would potentially affect over $1 trillion of U.S. imports, or 40% of the annual total.\nMore recently, two events suggest a potential reduction to the threat of further escalations. On October 7, the Administration signed a limited trade agreement with Japan, which did not specifically address auto trade but likely lessened the prospect of new tariffs. On October 11, the President announced near completion of an initial agreement with China, and indefinitely suspended a proposed 5% increase of all stage 1-3 tariffs, which was to occur on October 15. The Administration hopes to finalize the agreement by mid-November, and it remains unclear whether this proposed agreement will affect existing tariffs or scheduled December tariff increases.\nFigure 1. Trump Administration Tariffs and Affected Trade\n/\nSources: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas.\nNotes: Based on annual 2018 import values. Excludes exempted countries. Motor vehicle and parts import figure includes only U.S. imports from the European Union and Japan, which were the focus of the President\u2019s proclamation declaring motor vehicle imports a national security threat. Tariff-rate quotas (TRQs) are a form of import restriction in which one tariff applies up to a specific quantity or value of imports and a higher tariff applies above that threshold.\nAs tariffs act as a tax on foreign-produced goods, they distort price signals, potentially leading to less efficient consumption and production patterns, which may ultimately reduce U.S. and global economic growth rates. As of October 2, 2019, the United States collected $41 billion from the additional taxes paid by U.S. importers, according to U.S. Customs and Border Protection. Increasing tariffs also creates a general environment of economic uncertainty, potentially dampening business investment and creating a further drag on growth. Preliminary research, for example, suggests the increase in trade policy uncertainty may have reduced aggregate U.S. investment by 1% or more in 2018. Estimates of the tariffs\u2019 overall economic effects vary, depending on modeling assumptions and the specific set of tariffs considered. Most studies, however, predict declines in GDP growth: the Congressional Budget Office estimated that the tariffs in effect as of July 25, 2019, would lower U.S. GDP by roughly 0.3 percent by 2020 below a baseline without the tariffs; considering also recently proposed actions, the IMF estimated that the tariffs would reduce global GDP in 2020 by 0.5 percent.\nRetaliation amplifies the potential effects of the U.S. tariff measures. Retaliatory tariffs in effect, in response to both Section 232 and Section 301 actions, cover approximately $97.5 billion of U.S. annual exports, based on 2018 export data (Table 1). This amount is scheduled to increase to $112.6 billion, if China implements its announced plans to impose additional tariffs on December 15 and to reinstate additional tariffs on U.S. cars and auto parts. China, like the United States, however, has also begun granting limited tariff exclusions, lessening somewhat the scale of U.S. exports affected by retaliatory tariff measures. Retaliatory tariffs broaden the scope of U.S. industries potentially harmed, targeting those reliant on export markets and sensitive to price fluctuations, such as agricultural commodities. Some U.S. manufacturers have announced plans to shift production to other countries in order to avoid the tariffs on U.S. exports. Adverse effects could grow if a tit-for-tat process of retaliation continues and the scale of trade affected increases. \nTable 1. Retaliatory Actions in Effect\nRetaliatory Trade Action\nAffected U.S. Exports (millions, 2018)\nAdditional Tariff\nEffective Date\n\nSection 232\nEU\n$2,890 \n10-25%\nJune 25, 2018\n\n\nChina\n$2,522 \n15-25%\nApr. 2, 2018\n\n\nTurkey\n$1,771 \n4-70%\nJune 21, 2018\n\n\nIndiaa\n$1,392\n10-50% \nJune 16, 2019\n\n\nRussiab\n$431\n25-40%\nAug. 6, 2018c\n\n\nTotal Exports Affected by Section 232 Retaliation\n$9,006\n\n\n\nSection 301\nChina\u2014Stage 1c\n$12,896\n25%\nJuly 6, 2018\n\n\nChina\u2014Stage 2c\n$11,595\n25%\nAug. 23, 2018\n\n\nChina\u2014Stage 3c,d\n$59,700\n5-10%/\n 5-25%\nSept. 24, 2018/ \nJune 1, 2019\n\n\nChina\u2014Stage 4Ae\n$25,463\n5-10%\nSept. 1, 2019\n\n\nChina\u2014Stage 4Be (proposed)\n$41,791\n5-10%\nDec. 15, 2019\n\n\nChina\u2014Reinstated Auto Tariffs (proposed)\n$11,720\n5-25%\nDec. 15, 2019\n\n\nTotal Exports Affected by Section 301 Retaliationf\n$91,055\n\n\n\n\nTotal and Proposed Exports Affected by Section 301 Retaliationf\n$106,122\n\n\n\nOverall Total Exports Affected by Retaliationg\n$97,539\n\n\n\nOverall Total and Proposed Exports Affected by Retaliationg\n$112,606\n\n\n\nSources: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications.\nNotes: Canada and Mexico withdrew their retaliation after the Trump Administration exempted both countries from the Section 232 steel and aluminum duties.\nIndia\u2019s retaliatory tariffs were initially announced at the WTO in June 2018, with tariffs ranging from 10%-50%, but were repeatedly postponed. India\u2019s latest announcement appears to remove 2 of the 30 products from its initial list and may affect retaliatory tariff rates.\nRussia published its list of retaliatory tariff rates and products on July 6, 2018. The tariffs appear to have gone into effect within 30 days of publication.\nExport calculation excludes auto tariffs suspended until December 15, 2019.\nChina\u2019s retaliatory tariffs in response to U.S. stage 3 Section 301 tariffs initially ranged from 5-10%. In response to the Trump Administration\u2019s increase of Section 301 stage 3 tariffs to 25% on May 10, China increase its retaliatory tariffs on certain products to 20% and 25%.\nChina\u2019s Stage 4 retaliation includes new tariffs on 1,600 products and also increases the tariff rates of nearly 3,450 products that are already subject to retaliatory tariffs.\nTotal exports adjusted to account for tariff lines affected by multiple stages of China\u2019s retaliation to Section 301 tariffs.\nTotal exports adjusted to account for tariff lines affected by China\u2019s retaliation to both Section 232 and Section 301 tariffs.\nMany Members of Congress, U.S. businesses, interest groups, and trade partners, including major allies, have weighed in on the President\u2019s actions. While some U.S. stakeholders support the President\u2019s use of unilateral trade actions to the extent they result in a more level playing field for U.S. firms, many have raised concerns, including the chairman of the Senate Finance committee, who stated that the President\u2019s proposed tariffs on Mexico are a \u201cmisuse of presidential tariff authority.\u201d Several Members have introduced legislation that would constrain the President\u2019s authority (e.g., H.R. 723, S. 287, S. 365, and S. 899), while other Members and the Administration have advocated for increasing this authority (e.g., H.R. 764). As it debates the Administration\u2019s import restrictions, Congress may consider the following:\nDelegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Are additional congressional checks on such discretion necessary? \nEconomic Implications and Escalation. The Administration\u2019s tariffs imposed to date cover 16% of annual U.S. goods imports; proposed tariffs could potentially increase this to 40%. Negative effects of the tariffs may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. Most studies suggest the tariffs now in effect will reduce U.S. and global economic growth. What are the Administration\u2019s ultimate objectives from the tariff increases and do potential benefits justify potential costs?\nInternational Trading System and U.S. Foreign Relations. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, including at the World Trade Organization (WTO), U.S. trade partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings arguing that retaliatory countermeasures violate trade agreement obligations. What are the risks to the international trading system and to broader U.S. foreign policy goals of continued unilateral action and economic confrontation?", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN10971", "sha1": "22a930b46f2597408d9c5b7ebb026d8d5b3cb2b0", "filename": "files/20191024_IN10971_22a930b46f2597408d9c5b7ebb026d8d5b3cb2b0.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10971_files&id=/0.png": "files/20191024_IN10971_images_d3bfbce31f86f0e2d5558031896c229b28c959ef.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN10971", "sha1": "ea6c1a9db08a45bf0ba87c3475d0b0efd5536c15", "filename": "files/20191024_IN10971_ea6c1a9db08a45bf0ba87c3475d0b0efd5536c15.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4865, "name": "Import Policy" } ] }, { "source": "EveryCRSReport.com", "id": 604900, "date": "2019-09-12", "retrieved": "2019-09-16T22:04:24.914821", "title": "Escalating U.S. Tariffs: Affected Trade", "summary": "The trade practices of U.S. trading partners and the U.S. trade deficit are a focus of the Trump Administration. Citing these and other concerns, the President has imposed tariff increases under three U.S. laws: \n(1) Section 201 of the Trade Act of 1974 on U.S. imports of washing machines and solar products; \n(2) Section 232 of the Trade Expansion Act of 1962 on U.S. imports of steel and aluminum, and potentially motor vehicles/parts and titanium sponge (the President decided not to impose tariffs on uranium imports, after an investigation); and \n(3) Section 301 of the Trade Act of 1974 on U.S. imports from China. \nIn May 2019, in response to concerns over immigration, the President also proposed an additional 5% tariff on imports from Mexico under the International Emergency Economic Powers Act (IEEPA), but subsequently suspended the proposed tariffs indefinitely citing an agreement reached with Mexico. For a timeline of recent actions, see CRS Insight IN10943, Escalating U.S. Tariffs: Timeline. The Administration has stated that it is using existing and proposed tariffs for a range of purposes, including as leverage for trade negotiations with affected trading partners, such as China, Japan, and the European Union (EU), and, as noted, to influence Mexico\u2019s immigration policies. While tariffs may benefit a limited number of import-competing firms, they also increase costs for downstream users of imported products and consumers and may have broader negative effects on the U.S. economy, as well as several policy implications.\nThe multiple tariff increases applied to date, ranging from 10% to 45%, affect approximately 15% of U.S. annual imports. This amounts to $393.3 billion of imports using 2018 annual data; notably, the tariffs went into effect at various times in 2018 and 2019 (Figure 1). Section 301 tariffs on U.S. imports from China account for more than 90% of trade affected by the Administration\u2019s tariff actions. While the Administration has taken some steps to reduce the scale of imports affected by the tariffs (i.e., by exempting Canada and Mexico from the steel and aluminum duties and creating processes by which certain products may be excluded), the general trend is an escalation of tariff actions. \nIn the spring and summer of 2019, the Administration implemented and proposed a series of additional tariff actions, significantly expanding the share of U.S. trade potentially affected. In August, the Administration announced new Section 301 tariffs of 10% on approximately $300 billion of U.S. imports from China. In response, China announced retaliatory measures on approximately $75 billion of U.S. exports, most of which are additional tariffs on U.S. exports already subject to Chinese retaliation. The Administration countered by proposing to increase all U.S. Section 301 tariffs by 5%: from 25% to 30% on the existing approximately $250 billion of imports subject to stage 1-3 tariffs, to take effect on October 1, 2019 (now delayed until October 15, 2019); and from 10% to 15% on the new stage 4A and 4B tariff lists, effective September 1 and December 15 (Figure 1). In addition, President Trump declared U.S. motor vehicle imports a national security threat, particularly from the EU and Japan, granting him authority to impose tariff increases on such imports. The President also proposed an additional 5% to 25% tariff on all imports from Mexico (now indefinitely suspended). In total, these actions would potentially affect over $1 trillion of U.S. imports, or 40% of the annual total.\nFigure 1. Trump Administration Tariffs and Affected Trade\n/\nSources: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas.\nNotes: Based on annual 2018 import values. Excludes exempted countries. Motor vehicle and parts import figure includes only U.S. imports from the European Union and Japan, which were the focus of the President\u2019s proclamation declaring motor vehicle imports a national security threat. Tariff-rate quotas (TRQs) are a form of import restriction in which one tariff applies up to a specific quantity or value of imports and a higher tariff applies above that threshold.\nAs tariffs act as a tax on foreign-produced goods, they distort price signals, potentially leading to less efficient consumption and production patterns, which may ultimately reduce U.S. and global economic growth rates. As of August 29, 2019, the United States collected $35.9 billion from the additional taxes paid by U.S. importers, according to U.S. Customs and Border Protection. Increasing tariffs also create a general environment of economic uncertainty, potentially dampening business investment and creating a further drag on growth. Preliminary research, for example, suggests the increase in trade policy uncertainty may have reduced aggregate U.S. investment by 1% or more in 2018. Estimates of the tariffs\u2019 overall economic effects vary, depending on modeling assumptions and the specific set of tariffs considered. Most studies, however, predict declines in GDP growth: the Congressional Budget Office estimated that the tariffs in effect as of July 25, 2019, would lower U.S. GDP by roughly 0.3 percent by 2020 below a baseline without the tariffs; considering also recently proposed actions, the IMF estimated that the tariffs would reduce global GDP in 2020 by 0.5 percent.\nRetaliation amplifies the potential effects of the U.S. tariff measures. Retaliatory tariffs in effect, in response to both Section 232 and Section 301 actions, cover approximately $97.5 billion of U.S. annual exports, based on 2018 export data (Table 1). This amount is scheduled to increase to $112.5 billion, if China implements its recently announced plans to impose additional tariffs on December 15 and to reinstate additional tariffs on U.S. cars and auto parts. China, like the United States, however, has also begun granting limited tariff exclusions, lessening somewhat the scale of U.S. exports affected by retaliatory tariff measures. Retaliatory tariffs broaden the scope of U.S. industries potentially harmed, targeting those reliant on export markets and sensitive to price fluctuations, such as agricultural commodities. Some U.S. manufacturers have announced plans to shift production to other countries in order to avoid the tariffs on U.S. exports. Lost market access resulting from the retaliatory tariffs may compound concerns raised by many U.S. exporters that the United States increasingly faces higher tariffs than some competitors in foreign markets as other countries conclude trade liberalization agreements, such as the recently-enacted EU-Japan FTA and the TPP-11 agreement, which include major U.S. trade partners, such as Canada, the EU, Japan, and Mexico. Adverse effects could grow if a tit-for-tat process of retaliation continues and the scale of trade affected increases. \nTable 1. Retaliatory Actions in Effect\nRetaliatory Trade Action\nU.S. Exports (millions, 2018)\nAdditional Tariff\nEffective Date\n\nSection 232\nEU\n$2,893 \n10-25%\nJune 25, 2018\n\n\nChina\n$2,522 \n15-25%\nApr. 2, 2018\n\n\nTurkey\n$1,771 \n4-70%\nJune 21, 2018\n\n\nIndiaa\n$1,427\n10-50% \nJune 16, 2019\n\n\nRussiab\n$430\n25-40%\nAug. 6, 2018c\n\n\nTotal Exports Affected by Retaliation\n$9,043\n\n\n\nSection 301\nChina\u2014Stage 1c\n$12,896\n25%\nJuly 6, 2018\n\n\nChina\u2014Stage 2c\n$11,595\n25%\nAug. 23, 2018\n\n\nChina\u2014Stage 3c,d\n$59,698\n5-10%/\n 5-25%\nSept. 24, 2018/ \nJune 1, 2019\n\n\nChina\u2014Stage 4Ae\n$25,463\n5-10%\nSept. 1, 2019\n\n\nChina\u2014Stage 4Be (proposed)\n$41,790\n5-10%\nDec. 15, 2019\n\n\nChina\u2014Reinstated Auto Tariffs (proposed)\n$11,720\n5-25%\nDec. 15, 2019\n\n\nTotal Exports Affected by Retaliationf\n$90,967\n\n\n\n\nTotal and Proposed Exports Affected by Retaliationf\n$106,014\n\n\n\nOverall Total Exports Affected by Retaliationg\n$97,488\n\n\n\nOverall Total and Proposed Exports Affected by Retaliationg\n$112,535\n\n\n\nSources: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications.\nNotes: Canada and Mexico withdrew their retaliation after the Trump Administration exempted both countries from the Section 232 steel and aluminum duties.\nIndia\u2019s retaliatory tariffs were initially announced at the WTO in June 2018, with tariffs ranging from 10%-50%, but were repeatedly postponed. India\u2019s latest announcement appears to remove 2 of the 30 products from its initial list and may affect retaliatory tariff rates.\nRussia published its list of retaliatory tariff rates and products on July 6, 2018. The tariffs appear to have gone into effect within 30 days of publication.\nExport calculation excludes auto tariffs suspended until December 15, 2019.\nChina\u2019s retaliatory tariffs in response to U.S. stage 3 Section 301 tariffs initially ranged from 5-10%. In response to the Trump Administration\u2019s increase of Section 301 stage 3 tariffs to 25% on May 10, China increase its retaliatory tariffs on certain products to 20% and 25%.\nChina\u2019s Stage 4 retaliation includes new tariffs on 1,600 products and also increases the tariff rates of nearly 3,450 products that are already subject to retaliatory tariffs.\nTotal exports adjusted to account for tariff lines affected by multiple stages of China\u2019s retaliation to Section 301 tariffs.\nTotal exports adjusted to account for tariff lines affected by China\u2019s retaliation to both Section 232 and Section 301 tariffs.\nMany Members of Congress, U.S. businesses, interest groups, and trade partners, including major allies, have weighed in on the President\u2019s actions. While some U.S. stakeholders support the President\u2019s use of unilateral trade actions to the extent they result in a more level playing field for U.S. firms, many have raised concerns, including the chairman of the Senate Finance committee, who stated that the President\u2019s proposed tariffs on Mexico are a \u201cmisuse of presidential tariff authority.\u201d Several Members have introduced legislation that would constrain the President\u2019s authority (e.g., H.R. 723, S. 287, S. 365, and S. 899), while other Members and the Administration have advocated for increasing this authority (e.g., H.R. 764). As it debates the Administration\u2019s import restrictions, Congress may consider the following:\nDelegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Are additional congressional checks on such discretion necessary? \nEconomic Implications and Escalation. The Administration\u2019s tariffs imposed to date cover 15% of annual U.S. goods imports; proposed tariffs could potentially increase this to 40%. Negative effects of the tariffs may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. The potential drag on economic growth could be significant if tit-for-tat action escalates. What are the Administration\u2019s ultimate objectives from the tariff increases and do potential benefits justify potential costs?\nInternational Trading System and U.S. Foreign Relations. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, including at the World Trade Organization (WTO), U.S. trade partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings arguing that retaliatory countermeasures violate trade agreement obligations. What are the risks to the international trading system and to broader U.S. foreign policy goals of continued unilateral action and economic confrontation?", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN10971", "sha1": "663b7e0756508d5e7c7ddd4a5189c802533b37dd", "filename": "files/20190912_IN10971_663b7e0756508d5e7c7ddd4a5189c802533b37dd.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10971_files&id=/0.png": "files/20190912_IN10971_images_018c9342af4d5e5104c3dd87f4df17b840c07c15.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN10971", "sha1": "e4e576cf2ddc04bef61eb2f2dc2bafa6cef228e2", "filename": "files/20190912_IN10971_e4e576cf2ddc04bef61eb2f2dc2bafa6cef228e2.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4865, "name": "Import Policy" } ] }, { "source_dir": "crsreports.congress.gov", "title": "Escalating U.S. Tariffs: Affected Trade", "retrieved": "2020-09-05T09:20:47.754652", "id": "IN10971_13_2019-09-06", "formats": [ { "filename": "files/2019-09-06_IN10971_2306d733a5cc745ea283bf22b49509eb9e3c5f08.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/IN/IN10971/13", "sha1": "2306d733a5cc745ea283bf22b49509eb9e3c5f08" }, { "format": "HTML", "filename": "files/2019-09-06_IN10971_2306d733a5cc745ea283bf22b49509eb9e3c5f08.html" } ], "date": "2019-09-06", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "IN", "active": false, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=IN10971", "type": "CRS Insight" }, { "source": "EveryCRSReport.com", "id": 603797, "date": "2019-08-16", "retrieved": "2019-08-16T22:10:08.113330", "title": "Escalating U.S. Tariffs: Affected Trade", "summary": "The trade practices of U.S. trading partners and the U.S. trade deficit are a focus of the Trump Administration. Citing these and other concerns, the President has imposed tariff increases under three U.S. laws: \n(1) Section 201 of the Trade Act of 1974 on U.S. imports of washing machines and solar products; \n(2) Section 232 of the Trade Expansion Act of 1962 on U.S. imports of steel and aluminum, and potentially motor vehicles/parts and titanium sponge (the President decided not to impose tariffs on uranium imports, after an investigation); and \n(3) Section 301 of the Trade Act of 1974 on U.S. imports from China. \nIn May 2019, in response to concerns over immigration, the President also proposed an additional 5% tariff on imports from Mexico under the International Emergency Economic Powers Act (IEEPA), but subsequently suspended the proposed tariffs indefinitely citing an agreement reached with Mexico. For a timeline of recent actions, see CRS Insight IN10943, Escalating U.S. Tariffs: Timeline. The Administration has stated that it is using existing and proposed tariffs for a range of purposes, including as leverage for broader trade negotiations with affected trading partners, such as Japan and the European Union (EU), and, as noted, to influence Mexico\u2019s immigration policies.\nThe multiple tariff increases applied to date, ranging from 10% to 45%, affect approximately 10% of U.S. annual imports. This amounts to $267.5 billion of imports using 2018 annual data, but it should be noted that tariffs went into effect at various times in 2018 and 2019 (Figure 1). While the Administration has taken some steps to reduce the scale of imports affected by the tariffs (i.e., by exempting Canada and Mexico from the steel and aluminum duties and creating processes by which certain products may be excluded), the general trend is an escalation of tariff actions. \nIn May, the Administration increased additional tariffs to 25% on roughly $250 billion of imports from China and recently announced a 10% tariff will be imposed on the remaining roughly $300 billion of imports from China (with some exceptions) in two separate stages, taking effect on September 1 and December 15 (Figure 1). In addition, President Trump declared U.S. motor vehicle imports a national security threat, particularly from the EU and Japan, granting him authority to impose tariff increases on such imports. The President also proposed an additional 5% to 25% tariff on all imports from Mexico (now indefinitely suspended). In total, these actions would potentially affect over $1 trillion of U.S. imports, or 40% of the annual total. While tariffs may benefit a limited number of import-competing firms, they also increase costs for downstream users of imported products (e.g., Ford estimates the metal tariffs cost the firm nearly $1 billion) and consumers (e.g., research by economists from the New York Federal Reserve estimates the tariffs in effect in 2018 cost the average household $414, and forecasts that the household cost could grow to $831 with the tariff increases now in place), and may have broader negative effects on the U.S. economy, as well as several policy implications.\nFigure 1. Trump Administration Tariffs and Affected Trade\n/\nSource: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas.\nNotes: Based on annual 2018 import values. Excludes exempted countries. Motor vehicle and parts import figure includes only U.S. imports from the European Union and Japan, which were the focus of the President\u2019s proclamation declaring motor vehicle imports a national security threat. Tariff-rate quotas (TRQs) are a form of import restriction in which one tariff applies up to a specific quantity or value of imports and a higher tariff applies above that threshold.\nAs tariffs act as a tax on foreign-produced goods, they distort price signals, potentially leading to less efficient consumption and production patterns, which may ultimately reduce U.S. and global economic growth rates. As of August 5, 2019, the United States collected $32.7 billion from the additional taxes paid by U.S. importers, according to U.S. Customs and Border Protection. Increasing tariffs also create a general environment of economic uncertainty, potentially dampening business investment and creating a further drag on growth. Economic estimates of the tariff effects vary, depending on modeling assumptions and the specific set of tariffs considered. Most studies, however, predict declines in GDP growth: the Congressional Budget Office estimated that the tariffs in effect as of December 4, 2018, would lower U.S. GDP on average through 2029 by roughly 0.1 percentage point below a baseline without the tariffs; more recently, the OECD estimated that proposed increases on tariffs from China could further reduce U.S. growth by nearly 0.9 percentage points, including negative effects on investment.\nRetaliation amplifies the potential effects of the U.S. tariff measures. Retaliatory tariffs in effect cover approximately $93.2 billion of U.S. annual exports, based on 2018 export data (Table 1). Retaliatory tariffs broaden the scope of U.S. industries potentially harmed, targeting those reliant on export markets and sensitive to price fluctuations, such as agricultural commodities. Some U.S. manufacturers have announced plans to shift production to other countries in order to avoid the tariffs on U.S. exports. Lost market access resulting from the retaliatory tariffs may compound concerns raised by many U.S. exporters that the United States increasingly faces higher tariffs than some competitors in foreign markets as other countries conclude trade liberalization agreements, such as the recently-enacted EU-Japan FTA and the TPP-11 agreement, which include major U.S. trade partners, such as Canada, the EU, Japan, and Mexico. Adverse effects could grow if a tit-for-tat process of retaliation continues and the scale of trade affected increases. China recently announced its intent to take countermeasures against the next round of U.S. Section 301 tariffs. As China has already imposed tariff increases on nearly all its U.S. imports, it could potentially increase tariffs on the products it has already targeted or impose various punitive nontariff measures on U.S. firms operating in China. China also recently allowed its currency to depreciate to an 11-year low, which counters the effects of the tariffs and prompted the Administration to label the country a currency manipulator.\nTable 1. Retaliatory Actions in Effect\nRetaliatory Trade Action\nU.S. Exports (millions, 2018)\nAdditional Tariff\nEffective Date\n\nSection 232\nEU\n$2,893 \n10-25%\nJune 25, 2018\n\n\nChina\n$2,522 \n15-25%\nApr. 2, 2018\n\n\nTurkey\n$1,771 \n4-70%\nJune 21, 2018\n\n\nIndia\n$1,427\n10-50%a\nJune 16, 2019\n\n\nRussia\n$430\n25-40%\nAug. 6, 2018b\n\n\nTotal\n$9,043\n\n\n\nSection 301\nChina\u2014Stage 1\n$12,896\n25%\nJuly 6, 2018\n\n\nChina\u2014Stage 2\n$11,595\n25%\nAug. 23, 2018\n\n\nChina\u2014Stage 3c\n$59,698\n5-10%/\n 5-25%\nSept. 24, 2018/ \nJune 1, 2019\n\n\nTotal\n$84,189\n\n\n\nOverall Total in Effect\n$93,232\n\n\n\nSource: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications.\nNotes: Canada and Mexico withdrew their retaliation after the Trump Administration exempted both countries from the Section 232 steel and aluminum duties.\nIndia\u2019s retaliatory tariffs were initially announced at the WTO in June 2018, with tariff ranging from 10%-50%, but were repeatedly postponed. India\u2019s latest announcement appears to remove 2 of the 30 products from its initial list and may affect retaliatory tariff rates.\nRussia published its list of retaliatory tariff rates and products on July 6, 2018. The tariffs appear to have gone into effect within 30 days of publication.\nChina\u2019s retaliatory tariffs in response to U.S. stage 3 Section 301 tariffs initially ranged from 5-10%. In response to the Trump Administration\u2019s increase of Section 301 stage 3 tariffs to 25% on May 10, China increase its retaliatory tariffs on certain products to 20% and 25%\nMany Members of Congress, U.S. businesses, interest groups, and trade partners, including major allies, have weighed in on the President\u2019s actions. While some U.S. stakeholders support the President\u2019s use of unilateral trade actions to the extent they result in a more level playing field for U.S. firms, many have raised concerns, including the chairman of the Senate Finance committee, who stated that the President\u2019s proposed tariffs on Mexico are a \u201cmisuse of presidential tariff authority.\u201d Several Members have introduced legislation that would constrain the President\u2019s authority (e.g., H.R. 723, S. 287, S. 365, and S. 899), while other Members and the Administration has advocated for increasing this authority (e.g., H.R. 764). As it debates the Administration\u2019s import restrictions, Congress may consider the following:\nDelegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Are additional congressional checks on such discretion necessary? \nEconomic Implications and Escalation. The Administration\u2019s tariffs imposed to date cover 10% of annual U.S. goods imports; proposed tariffs could potentially increase this to 40%. Negative effects of the tariffs may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. The potential drag on economic growth could be significant if tit-for-tat action escalates. What are the Administration\u2019s ultimate objectives from the tariff increases and do potential benefits justify potential costs?\nInternational Trading System and U.S. Foreign Relations. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, including at the World Trade Organization (WTO), U.S. trade partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings arguing that retaliatory countermeasures violate trade agreement obligations. What are the risks to the international trading system and to broader U.S. foreign policy goals of continued unilateral action and economic confrontation?", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN10971", "sha1": "372e9ae7b0bd97ef81afcd36aaa8161d1fbe80f2", "filename": "files/20190816_IN10971_372e9ae7b0bd97ef81afcd36aaa8161d1fbe80f2.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10971_files&id=/0.png": "files/20190816_IN10971_images_4d4187fdb3dd9f7548393511d5b875fa4a70379c.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN10971", "sha1": "6c74a2945c369712f9e110b400b2d1ecc95c7f04", "filename": "files/20190816_IN10971_6c74a2945c369712f9e110b400b2d1ecc95c7f04.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4865, "name": "Import Policy" } ] }, { "source": "EveryCRSReport.com", "id": 603452, "date": "2019-08-09", "retrieved": "2019-08-12T22:06:21.698930", "title": "Escalating U.S. Tariffs: Affected Trade", "summary": "The trade practices of U.S. trading partners and the U.S. trade deficit are a focus of the Trump Administration. Citing these and other concerns, the President has imposed tariff increases under three U.S. laws: \n(1) Section 201 of the Trade Act of 1974 on U.S. imports of washing machines and solar products; \n(2) Section 232 of the Trade Expansion Act of 1962 on U.S. imports of steel and aluminum, and potentially motor vehicles/parts and titanium sponge (the President decided not to impose tariffs on uranium imports, after an investigation); and \n(3) Section 301 of the Trade Act of 1974 on U.S. imports from China. \nIn May 2019, in response to concerns over immigration, the President also proposed an additional 5% tariff on imports from Mexico under the International Emergency Economic Powers Act (IEEPA), but subsequently suspended the proposed tariffs indefinitely citing an agreement reached with Mexico. For a timeline of recent actions, see CRS Insight IN10943, Escalating U.S. Tariffs: Timeline. The Administration has stated that it is using existing and proposed tariffs for a range of purposes, including as leverage for broader trade negotiations with affected trading partners, such as Japan and the European Union (EU), and, as noted, to influence Mexico\u2019s immigration policies.\nThe multiple tariff increases applied to date, ranging from 10% to 45%, affect approximately 10% of U.S. annual imports. This amounts to $267.5 billion of imports using 2018 annual data, but it should be noted that tariffs went into effect at various times in 2018 and 2019 (Figure 1). While the Administration has taken some steps to reduce the scale of imports affected by the tariffs (i.e., by exempting Canada and Mexico from the steel and aluminum duties and creating processes by which certain products may be excluded), the general trend is an escalation of tariff actions. \nThe Administration has increased tariffs by 25% on roughly $250 billion of imports from China and recently announced a 10% tariff would take effect on September 1st on the remaining roughly $300 billion of imports (with some exceptions). In addition, President Trump declared U.S. motor vehicle imports a national security threat, particularly from the EU and Japan, granting him authority to impose tariff increases on such imports. The President also proposed an additional 5% to 25% tariff on all imports from Mexico (now indefinitely suspended). In total, these actions would potentially affect over $1 trillion of U.S. imports, or 40% of the annual total. While tariffs may benefit a limited number of import-competing firms, they also increase costs for downstream users of imported products (e.g., Ford estimates the metal tariffs cost the firm nearly $1 billion) and consumers (e.g., research by economists from the New York Federal Reserve estimates the tariffs in effect in 2018 cost the average household $414, and forecasts that the household cost could grow to $831 with the tariff increases now in place), and may have broader negative effects on the U.S. economy, as well as several policy implications.\nFigure 1. Trump Administration Tariffs and Affected Trade\n/\nSource: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas.\nNotes: Based on annual 2018 import values. Excludes exempted countries. Motor vehicle and parts import figure includes only U.S. imports from the European Union and Japan, which were the focus of the President\u2019s proclamation declaring motor vehicle imports a national security threat. Tariff-rate quotas (TRQs) are a form of import restriction in which one tariff applies up to a specific quantity or value of imports and a higher tariff applies above that threshold.\nAs tariffs act as a tax on foreign-produced goods, they distort price signals, potentially leading to less efficient consumption and production patterns, which may ultimately reduce U.S. and global economic growth rates. As of August 5, 2019, the United States collected $32.7 billion from the additional taxes paid by U.S. importers, according to U.S. Customs and Border Protection. Increasing tariffs also create a general environment of economic uncertainty, potentially dampening business investment and creating a further drag on growth. Economic estimates of the tariff effects vary, depending on modeling assumptions and the specific set of tariffs considered. Most studies, however, predict declines in GDP growth: the Congressional Budget Office estimated that the tariffs in effect as of December 4, 2018, would lower U.S. GDP on average through 2029 by roughly 0.1 percentage point below a baseline without the tariffs; more recently, the OECD estimated that proposed increases on tariffs from China could further reduce U.S. growth by nearly 0.9 percentage points, including negative effects on investment.\nRetaliation amplifies the potential effects of the U.S. tariff measures. Retaliatory tariffs in effect cover approximately $93.2 billion of U.S. annual exports, based on 2018 export data (Table 1). Retaliatory tariffs broaden the scope of U.S. industries potentially harmed, targeting those reliant on export markets and sensitive to price fluctuations, such as agricultural commodities. Some U.S. manufacturers have announced plans to shift production to other countries in order to avoid the tariffs on U.S. exports. Lost market access resulting from the retaliatory tariffs may compound concerns raised by many U.S. exporters that the United States increasingly faces higher tariffs than some competitors in foreign markets as other countries conclude trade liberalization agreements, such as the recently-enacted EU-Japan FTA and the TPP-11 agreement, which include major U.S. trade partners, such as Canada, the EU, Japan, and Mexico. Adverse effects could grow if a tit-for-tat process of retaliation continues and the scale of trade affected increases. China\u2019s potential retaliation against another round of U.S. tariffs is limited by the fact that it has already imposed tariff increases on nearly all its U.S. imports, but it could further increase tariffs on the products it has already targeted or impose various punitive nontariff measures on U.S. firms operating in China. China also recently allowed its currency to depreciate to an 11-year low, which counters the effects of the tariffs and prompted the Administration to label the country a currency manipulator.\nTable 1. Retaliatory Actions in Effect\nRetaliatory Trade Action\nU.S. Exports (millions, 2018)\nAdditional Tariff\nEffective Date\n\nSection 232\nEU\n$2,893 \n10-25%\nJune 25, 2018\n\n\nChina\n$2,522 \n15-25%\nApr. 2, 2018\n\n\nTurkey\n$1,771 \n4-70%\nJune 21, 2018\n\n\nIndia\n$1,427\n10-50%a\nJune 16, 2019\n\n\nRussia\n$430\n25-40%\nAug. 6, 2018b\n\n\nTotal\n$9,043\n\n\n\nSection 301\nChina\u2014Stage 1\n$12,896\n25%\nJuly 6, 2018\n\n\nChina\u2014Stage 2\n$11,595\n25%\nAug. 23, 2018\n\n\nChina\u2014Stage 3c\n$59,698\n5-10%/\n 5-25%\nSept. 24, 2018/ \nJune 1, 2019\n\n\nTotal\n$84,189\n\n\n\nOverall Total in Effect\n$93,232\n\n\n\nSource: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications.\nNotes: Canada and Mexico withdrew their retaliation after the Trump Administration exempted both countries from the Section 232 steel and aluminum duties.\nIndia\u2019s retaliatory tariffs were initially announced at the WTO in June 2018, with tariff ranging from 10%-50%, but were repeatedly postponed. India\u2019s latest announcement appears to remove 2 of the 30 products from its initial list and may affect retaliatory tariff rates.\nRussia published its list of retaliatory tariff rates and products on July 6, 2018. The tariffs appear to have gone into effect within 30 days of publication.\nChina\u2019s retaliatory tariffs in response to U.S. stage 3 Section 301 tariffs initially ranged from 5-10%. In response to the Trump Administration\u2019s increase of Section 301 stage 3 tariffs to 25% on May 10, China increase its retaliatory tariffs on certain products to 20% and 25%\nMany Members of Congress, U.S. businesses, interest groups, and trade partners, including major allies, have weighed in on the President\u2019s actions. While some U.S. stakeholders support the President\u2019s use of unilateral trade actions to the extent they result in a more level playing field for U.S. firms, many have raised concerns, including the chairman of the Senate Finance committee, who stated that the President\u2019s proposed tariffs on Mexico are a \u201cmisuse of presidential tariff authority.\u201d Several Members have introduced legislation that would constrain the President\u2019s authority (e.g., H.R. 723, S. 287, S. 365, and S. 899), while other Members and the Administration has advocated for increasing this authority (e.g., H.R. 764). As it debates the Administration\u2019s import restrictions, Congress may consider the following:\nDelegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Are additional congressional checks on such discretion necessary? \nEconomic Implications and Escalation. The Administration\u2019s tariffs imposed to date cover 10% of annual U.S. goods imports; proposed tariffs could potentially increase this to 40%. Negative effects of the tariffs may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. The potential drag on economic growth could be significant if tit-for-tat action escalates. What are the Administration\u2019s ultimate objectives from the tariff increases and do potential benefits justify potential costs?\nInternational Trading System and U.S. Foreign Relations. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, including at the World Trade Organization (WTO), U.S. trade partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings arguing that retaliatory countermeasures violate trade agreement obligations. What are the risks to the international trading system and to broader U.S. foreign policy goals of continued unilateral action and economic confrontation?", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN10971", "sha1": "db036f961702b11451e9254b3eb0006fbe3e4fec", "filename": "files/20190809_IN10971_db036f961702b11451e9254b3eb0006fbe3e4fec.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10971_files&id=/0.png": "files/20190809_IN10971_images_39a35024086bc5b0df1809d1c3d5e7356b8afae5.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN10971", "sha1": "0cb9961c0b94e4f99a1cd38e008624c406c4d0d1", "filename": "files/20190809_IN10971_0cb9961c0b94e4f99a1cd38e008624c406c4d0d1.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4865, "name": "Import Policy" } ] }, { "source": "EveryCRSReport.com", "id": 600989, "date": "2019-06-21", "retrieved": "2019-07-02T22:11:36.111004", "title": "Escalating U.S. Tariffs: Affected Trade", "summary": "The trade practices of U.S. trading partners and the U.S. trade deficit are a focus of the Trump Administration. Citing these and other concerns, the President has imposed tariff increases under three U.S. laws: \n(1) Section 201 of the Trade Act of 1974 on U.S. imports of washing machines and solar products; \n(2) Section 232 of the Trade Expansion Act of 1962 on U.S. imports of steel and aluminum, and potentially motor vehicles and parts, uranium, and titanium sponge; and \n(3) Section 301 of the Trade Act of 1974 on U.S. imports from China. \nIn response to concerns over immigration, the President also recently proposed an additional 5% tariff on imports from Mexico under the International Emergency Economic Powers Act (IEEPA), but subsequently suspended the proposed tariffs indefinitely citing an agreement reached with Mexico. For a timeline of recent actions, see CRS Insight IN10943, Escalating U.S. Tariffs: Timeline. The Administration has stated that it is using existing and proposed tariffs for a range of purposes, including as leverage for broader trade negotiations with affected trading partners, such as Japan and the European Union (EU), and, as noted, to influence Mexico\u2019s immigration policies.\nThe multiple tariff increases applied to date, ranging from 10% to 45%, affect approximately 10% of U.S. annual imports. This amounts to $267.5 billion of imports using 2018 annual data, but it should be noted that tariffs went into effect at various times in 2018 and 2019 (Figure 1). While the Administration has taken some steps to reduce the scale of imports affected by the tariffs (i.e., by exempting Canada and Mexico from the steel and aluminum duties and creating processes by which certain products may be excluded), the general trend is an escalation of tariff actions. \nThe Administration has increased tariffs by 25% on roughly $250 billion of imports from China and has proposed a 25% tariff increase on the remaining roughly $300 billion (with some exceptions). In addition, President Trump declared U.S. motor vehicle imports a national security threat, particularly from the EU and Japan, granting him authority to impose tariff increases on such imports. The President also proposed an additional 5% to 25% tariff on all imports from Mexico (now indefinitely suspended). In total, these actions would potentially affect over $1 trillion of U.S. imports, or 40% of the annual total. While tariffs may benefit a limited number of import-competing firms, they also increase costs for downstream users of imported products (e.g., Ford estimates the metal tariffs cost the firm nearly $1 billion) and consumers (e.g., research by economists from the New York Federal Reserve estimates the tariffs in effect in 2018 cost the average household $414, which could grow to $831 with the recent 15% increase on Chinese imports), and may have broader negative effects on the U.S. economy, as well as several policy implications.\nFigure 1. Trump Administration Tariffs and Affected Trade\n/\nSource: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas.\nNotes: Based on annual 2018 import values. Excludes exempted countries. Motor vehicle and parts import figure includes only U.S. imports from the European Union and Japan, which were the focus of the President\u2019s proclamation declaring motor vehicle imports a national security threat. Tariff-rate quotas (TRQs) are a form of import restriction in which one tariff applies up to a specific quantity or value of imports and a higher tariff applies above that threshold.\nAs tariffs act as a tax on foreign-produced goods, they distort price signals, potentially leading to less efficient consumption and production patterns, which may ultimately reduce U.S. and global economic growth rates. As of June 5, 2019, the United States collected $26.1 billion from the additional taxes paid by U.S. importers, according to U.S. Customs and Border Protection. Increasing tariffs also create a general environment of economic uncertainty, potentially dampening business investment and creating a further drag on growth. Economic estimates of the tariff effects vary, depending on modeling assumptions and the specific set of tariffs considered. Most studies, however, predict declines in GDP growth: the Congressional Budget Office estimated that the tariffs in effect as of December 4, 2018 would lower U.S. GDP on average through 2029 by roughly 0.1 percentage point below a baseline without the tariffs; more recently, the OECD estimated that proposed increases on tariffs from China could further reduce U.S. growth by nearly 0.9 percentage points, including negative effects on investment.\nRetaliation amplifies the potential effects of the U.S. tariff measures. Retaliatory tariffs in effect cover approximately $93.2 billion of U.S. annual exports, based on 2018 export data (Table 1). Retaliatory tariffs broaden the scope of U.S. industries potentially harmed, targeting those reliant on export markets and sensitive to price fluctuations, such as agricultural commodities. Some U.S. manufacturers have announced plans to shift production to other countries in order to avoid the tariffs on U.S. exports. Lost market access resulting from the retaliatory tariffs may compound concerns raised by many U.S. exporters that the United States increasingly faces higher tariffs than some competitors in foreign markets as other countries conclude trade liberalization agreements, such as the recently-enacted EU-Japan FTA and the TPP-11 agreement, which include major U.S. trade partners, such as Canada, the EU, Japan, and Mexico. Adverse effects could grow if a tit-for-tat process of retaliation continues and the scale of trade affected increases. China\u2019s potential retaliation against another round of U.S. tariffs is limited by the fact that it has already imposed tariff increases on nearly all its U.S. imports, but it could further increase tariffs on the products it has already targeted or impose various punitive nontariff measures on U.S. firms operating in China.\nTable 1. Retaliatory Actions in Effect\nRetaliatory Trade Action\nU.S. Exports (millions, 2018)\nAdditional Tariff\nEffective Date\n\nSection 232\nEU\n$2,893 \n10-25%\nJune 25, 2018\n\n\nChina\n$2,522 \n15-25%\nApr. 2, 2018\n\n\nTurkey\n$1,771 \n4-70%\nJune 21, 2018\n\n\nIndia\n$1,427\n10-50%a\nJune 16, 2019\n\n\nRussia\n$430\n25-40%\nAug. 6, 2018b\n\n\nTotal\n$9,043\n\n\n\nSection 301\nChina\u2014Stage 1\n$12,896\n25%\nJuly 6, 2018\n\n\nChina\u2014Stage 2\n$11,595\n25%\nAug. 23, 2018\n\n\nChina\u2014Stage 3c\n$59,698\n5-10%/\n 5-25%\nSept. 24, 2018/ \nJune 1, 2019\n\n\nTotal\n$84,189\n\n\n\nOverall Total in Effect\n$93,232\n\n\n\nSource: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications.\nNotes: Canada and Mexico withdrew their retaliation after the Trump Administration exempted both countries from the Section 232 steel and aluminum duties.\nIndia\u2019s retaliatory tariffs were initially announced at the WTO in June 2018, with tariff ranging from 10%-50%, but were repeatedly postponed. India\u2019s latest announcement appears to remove 2 of the 30 products from its initial list and may affect retaliatory tariff rates.\nRussia published its list of retaliatory tariff rates and products on July 6, 2018. The tariffs appear to have gone into effect within 30 days of publication.\nChina\u2019s retaliatory tariffs in response to U.S. stage 3 Section 301 tariffs initially ranged from 5-10%. In response to the Trump Administration\u2019s increase of Section 301 stage 3 tariffs to 25% on May 10, China increase its retaliatory tariffs on certain products to 20% and 25%\nMany Members of Congress, U.S. businesses, interest groups, and trade partners, including major allies, have weighed in on the President\u2019s actions. While some U.S. stakeholders support the President\u2019s use of unilateral trade actions to the extent they result in a more level playing field for U.S. firms, many have raised concerns, including the chairman of the Senate Finance committee, who stated that the President\u2019s recently proposed tariffs on Mexico are a \u201cmisuse of presidential tariff authority.\u201d Several Members have introduced legislation that would constrain the President\u2019s authority (e.g., H.R. 723, S. 287, and S. 365), while other Members and the Administration has advocated for increasing this authority (e.g., H.R. 764). As it debates the Administration\u2019s import restrictions, Congress may consider the following:\nDelegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Are additional congressional checks on such discretion necessary? \nEconomic Implications and Escalation. The Administration\u2019s tariffs imposed to date cover 10% of annual U.S. goods imports; proposed tariffs could potentially increase this to 40%. Negative effects of the tariffs may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. The potential drag on economic growth could be significant if tit-for-tat action escalates. What are the Administration\u2019s ultimate objectives from the tariff increases and do potential benefits justify potential costs?\nInternational Trading System and U.S. Foreign Relations. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, including at the World Trade Organization (WTO), U.S. trade partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings arguing that retaliatory countermeasures violate trade agreement obligations. What are the risks to the international trading system and to broader U.S. foreign policy goals of continued unilateral action and economic confrontation?", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "https://www.crs.gov/Reports/IN10971", "sha1": "a242a559c5d594c4fbc43cf3ee809e641eddf28f", "filename": "files/20190621_IN10971_a242a559c5d594c4fbc43cf3ee809e641eddf28f.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10971_files&id=/0.png": "files/20190621_IN10971_images_a59c6c68b46df0b8180df79f42d1b102de7b8cc9.png" } }, { "format": "PDF", "encoding": null, "url": "https://www.crs.gov/Reports/pdf/IN10971", "sha1": "2339fb67ca37ff4f5bb2ff8e59ff97d83a730cc5", "filename": "files/20190621_IN10971_2339fb67ca37ff4f5bb2ff8e59ff97d83a730cc5.pdf", "images": {} } ], "topics": [ { "source": "IBCList", "id": 4865, "name": "Import Policy" } ] }, { "source_dir": "crsreports.congress.gov", "title": "Escalating U.S. Tariffs: Affected Trade", "retrieved": "2020-09-05T09:20:47.751929", "id": "IN10971_5_2019-06-05", "formats": [ { "filename": "files/2019-06-05_IN10971_f8585dc875bc276574ebd81bc6ebd6d7857e9045.pdf", "format": "PDF", "url": "https://crsreports.congress.gov/product/pdf/IN/IN10971/5", "sha1": "f8585dc875bc276574ebd81bc6ebd6d7857e9045" }, { "format": "HTML", "filename": "files/2019-06-05_IN10971_f8585dc875bc276574ebd81bc6ebd6d7857e9045.html" } ], "date": "2019-06-05", "summary": null, "source": "CRSReports.Congress.gov", "typeId": "IN", "active": false, "sourceLink": "https://crsreports.congress.gov/product/details?prodcode=IN10971", "type": "CRS Insight" }, { "source": "EveryCRSReport.com", "id": 585622, "date": "2018-09-24", "retrieved": "2018-10-05T22:18:26.871108", "title": "Escalating Tariffs: Potential Impacts", "summary": "Concerns over trading partner trade practices and the U.S. trade deficit have been a focus of the Trump Administration. For a timeline of recent actions, see CRS Insight IN10943, Escalating Tariffs: Timeline. Citing these concerns and others, the President has imposed tariffs under three U.S. laws and authorities (Figure 1) that allow the Administration to unilaterally impose trade restrictions: (1) Section 201 on U.S. imports of washing machines and solar products; (2) Section 232 on U.S. imports of steel and aluminum, and potentially autos and uranium, and (3) Section 301 on U.S. imports from China. Annual U.S. imports of goods subject to the additional tariffs, which range from 10% to 50%, totaled $282 billion in 2017 (Table 1). All formally proposed tariffs are now in effect, but the President has informally raised the prospect of tariffs on an additional $267 billion of U.S. annual imports from China, and, pending a Section 232 investigation, approximately $361 billion of U.S. auto and parts imports. While the tariffs may benefit import-competing U.S. producers, they are also likely to increase costs for downstream users of imported products and consumers. The Administration could be using the tariffs in part to pressure affected countries into broader trade negotiations, such as the U.S.-EU trade liberalization talks, but it is unclear what specific outcomes the Administration is seeking.\nFigure 1. Trump Administration Tariffs and Affected Imports\n/\nSource: CRS calculations with data from U.S. Census Bureau sourced through Global Trade Atlas.\nNotes: Based on 2017 import values. Increased U.S. import tariffs may reduce demand for imports lowering annual import values. The figure above includes all U.S. imports from China under HTS 85176200 ($22.9 billion in 2017). A portion of the products currently included in this category are excluded from the tariffs, but there is currently no statistical reporting number (HTS 10 digit code) for these excluded items such that CRS is unable to determine the portion of trade under this category that will be excluded. USITC is creating a new statistical reporting number, HTS 8517620090, to capture these excluded items.\nRetaliation may amplify the potential negative effects of the U.S. tariff measures. Retaliatory tariffs in effect cover almost $126 billion of U.S. annual exports, based on 2017 export data (Table 2). Economically, retaliatory tariffs broaden the scope of U.S. industries potentially harmed, targeting those reliant on export markets and sensitive to price fluctuations, such as agricultural commodities. Some U.S. manufacturers have announced plans to shift production to other countries in order to avoid the tariffs on U.S. exports. Lost market access resulting from the retaliatory tariffs may compound concerns raised by many U.S. exporters that the United States increasingly faces higher tariffs than some competitors in foreign markets as other countries proceed with trade liberalization agreements, such as the recently signed EU-Japan FTA. Adverse effects could grow if a tit-for-tat process of retaliation continues and the scale of trade affected increases. For example, the President stated that $267 billion of additional U.S. imports from China could face increased tariffs. China\u2019s potential retaliation against another round of U.S. tariffs is limited by the fact that it has already imposed tariff increases on nearly all its U.S. imports, but it could further increase tariffs on the products it has already targeted or begin imposing nontariff measures such as informal pressure to limit U.S. multinational sales in China.\nNew Section 232 actions by the Administration could result in larger potential trade effects. On March 23, 2018, the Commerce Department initiated a new Section 232 investigation on U.S. auto and auto parts imports. Motor vehicles and parts accounted for $361 billion of U.S. imports in 2017. The EU, which accounts for more than $50 billion of U.S. motor vehicle and parts imports, has reportedly threatened comparable retaliatory measures. The globally integrated nature of the industry could complicate the impact of the tariffs. For example, affiliates of foreign motor vehicle firms operating in the United States exported more than $49 billion (nearly $70 billion including wholesale trade) in 2015 (latest available data). Although the auto investigation remains ongoing, the Administration has stated it will not impose tariffs while the recently announced U.S.-EU trade talks are ongoing. On July 18, the Administration began a fourth Section 232 investigation on U.S. uranium imports.\nMany Members of Congress and U.S. businesses, interest groups, and trade partners, including major allies, have weighed in on the President\u2019s actions. While some U.S. stakeholders support the President\u2019s use of unilateral trade actions, many have raised concerns, including the chairs of the Ways and Means and Senate Finance Committees, about potential negative impacts. In July 2017, Congress passed a nonbinding resolution directing appropriations bill conferees to include language giving Congress a role in Section 232 determinations, and several Members have introduced legislation that would constrain the President\u2019s authority (e.g., S. 3013 and S. 3266). As it debates the Administration\u2019s import restrictions, Congress may consider the following:\nDelegation of Authority. Among these statutes, only Section 201 requires an affirmative finding by an independent agency (the ITC) before the President may restrict imports. Section 232 and Section 301 investigations are undertaken by the Administration, giving the President broad discretion in their use. Are additional congressional checks on such discretion necessary? \nEconomic Implications and Escalation. The Administration\u2019s tariffs imposed to date cover more than 10% of annual U.S. goods imports; pending investigations and threatened further counter-retaliations could potentially increase this to nearly 30%. While most economists estimate that the current level of tariffs is unlikely to have major effects on the overall U.S. economy, these effects may be substantial for individual firms reliant either on imports subject to the U.S. tariffs or exports facing retaliatory measures. The potential drag on economic growth could be significant if tit-for-tat action escalates. What are the Administration\u2019s ultimate objectives from the tariff increases and do potential benefits justify potential costs?\nInternational Trading System. While the Administration argues that the imposition of U.S. import restrictions is within its rights under international trade agreement obligations, U.S. trade partners disagree and have initiated dispute proceedings, and begun retaliating. The United States has initiated its own dispute proceedings arguing that retaliatory countermeasures violate trade agreement obligations. What are the risks to the international trading system of continued unilateral action?\nPotential Trade Affected\nThe tables below provide the range of potential trade volumes affected by the U.S. tariffs and trading partner retaliation. In addition to tariffs, the President has imposed quotas, or quantitative limits on U.S. imports of certain goods from specified countries, as well as tariff-rate quotas (TRQs), for which one tariff applies up to a specific quantity of imports and a higher tariff applies above that threshold.\nTable 1. U.S. Import Restrictions\nU.S. Trade Action\nU.S. Imports (millions, 2017)\nAdditional Tariff\nPotential Annual Tariff Revenue (millions, 2017)\nEffective Date\n\nSection 201\n\nSolar Cells/ Modules\n$5,196\nTRQ (0%, 30%)/ 30%\n$1,559\nFeb. 7, 2018\n\n\nLarge Washers/ Washer Parts\n$1,927\n TRQ (20%, 50%)/ TRQ (0%, 50%)\n$964\nFeb. 7, 2018\n\n\nTotal\n$7,123\n\n$2,523\n\n\nSection 232\n\nAluminum\n$16,643\n10%\n$1,664\nMar. 23, 2018\n\n\nSteel\n$23,369\n25%a\n$6,140\nMar. 23, 2018\n\n\nTotal\n$40,012\n\n$7,805\n\n\nSection 301\nChina - Stage 1\n$32,262\n25%\n$8,066\nJuly 6, 2018\n\n\nChina - Stage 2 \n$13,685\n25%\n$3,421\nAug. 23, 2018\n\n\nChina - Stage 3\n$188,897b\n10%(2018) 25%(2019) \n $42,502c\nSept. 24, 2018\n\n\nTotal\n$234,844\n\n$53,989\n\n\nTotal in Effect\n$281,979\n\n$64,316\n\n\nSource: Calculations by CRS based on trade data from U.S. Census Bureau and tariff data from Administration notifications.\nNotes: Potential tariff revenue estimated using 2017 import values. This does not account for potential fluctuations in demand resulting from the tariffs or other variables. Increases in the price of goods resulting from the tariffs are likely to decrease demand for imports and therefore result in lower revenue collection than the estimated amounts. TRQ tariff revenue estimated assuming all imports are subject to over quota tariff.\nU.S. steel tariff is 50% on imports from Turkey.\nThis includes all U.S. imports from China under HTS 85176200 ($22.9 billion in 2017). A portion of the products currently included in this category are excluded from the tariffs, but there is currently no statistical reporting number (HTS 10 digit code) for these excluded items such that CRS is unable to determine the portion of trade under this category that will be excluded. USITC is creating a new statistical reporting number, HTS 8517620090, to capture these excluded items moving forward.\nAnnual total revenue estimate calculated with 2 months at 10% and 10 months at 25%. \nTable 2. Retaliatory Actions\nRetaliatory Trade Action\nU.S. Exports (millions, 2017)\nAdditional Tariff\nPotential Annual Tariff Revenue (millions, 2017)\nEffective Date\n\nSection 201\n\nSouth Korea (Solar and Washers)\n$1,377a\nTBD\n$474a\n2021\n\n\nChina (Solar and Washers)\n$654a\nTBD\n$220a\n2021\n\n\nJapan (Solar)\n$83a\nTBD\n$25a\n2021\n\n\nTotal\n$2,114\n\n$719\n\n\nSection 232\n\nCanada\n$12,748 \n10-25%\n$1,920 \nJuly 1, 2018\n\n\nMexico\n$3,691 \n7-25%\n$730 \nPartial-June 5, Full-July 5, 2018\n\n\nEuropean Union (EU)\u2014Stage 1\n$3,204 \n10-25%\n$781 \nJune 25, 2018\n\n\nEU\u2014Stage 2\n$4,239 \n10-50%\n$931 \n2021\n\n\nChina\n$2,969 \n15-25%\n$645 \nApr. 2, 2018\n\n\nJapan\n$1,911a\nTBD\n$440a\nTBD\n\n\nTurkey\n$1,788 \n4-140%b\n$935 \nJune 21, 2018b\n\n\nIndia\n$1,396 \n10-50%\n$240 \nNov. 2, 2018\n\n\nRussia\n$347\n25-40%\n$105\nAug. 6, 2018c\n\n\nRussia\u2014Stage 2\nTBD\nTBD\nTBD\n2021\n\n\nTotal\n$32,292 \n\n$6,727 \n\n\nSection 301\nChina\u2014Stage 1\n$33,834\n25%\n$8,459\nJuly 6, 2018\n\n\nChina\u2014Stage 2\n$14,108\n25%\n$3,527\nAug. 23, 2018\n\n\nChina\u2014Stage 3\n$53,296\n5%-10%\n$3,650\nSept. 24, 2018\n\n\nTotal\n$101,238\n\n$15,636\n\n\nTotal in Effect\n$125,984\n\n$20,752\n\n\nSource: CRS calculations based on import data of U.S. trade partner countries sourced from Global Trade Atlas and tariff details from WTO or government notifications.\nNotes: Potential tariff revenue estimated using 2017 import values in dollars (foreign trade data converted to U.S. dollars based on monthly average exchange rates during the relevant time periods). This does not account for potential fluctuations in demand resulting from the tariffs or other variables. Increases in the price of goods resulting from the tariffs are likely to decrease demand for imports and therefore result in lower revenue collection than the estimated amounts. TRQ tariff revenue estimated assuming all imports are subject to over quota tariff.\nRetaliation announcements did not include a product list or specific tariff values. Retaliatory export and tariff value estimated based on retaliation commensurate with U.S. tariff actions. \nTurkey\u2019s retaliatory tariffs have been in effect since June 2018. Turkey increased the tariff rates in August 2018 in response to the Trump Administration\u2019s decision to increase the U.S. steel tariff on Turkish imports to 50%. \nRussia published its list of retaliatory tariff rates and products on July 6, 2018. The tariffs appear to go into effect within 30 days of publication.", "type": "CRS Insight", "typeId": "INSIGHTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/IN10971", "sha1": "f6161108473ecb7c562d4309878aac5ab963baa5", "filename": "files/20180924_IN10971_f6161108473ecb7c562d4309878aac5ab963baa5.html", "images": { "/products/Getimages/?directory=IN/ASPX/IN10971_files&id=/0.png": "files/20180924_IN10971_images_56426ce205ec5896f3513d999a2c4e6329f2244c.png" } }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/IN10971", "sha1": "0bbfbdb5497645bdeaf0e0586d5a39ff2ea39f73", "filename": "files/20180924_IN10971_0bbfbdb5497645bdeaf0e0586d5a39ff2ea39f73.pdf", "images": {} } ], "topics": [] } ], "topics": [ "CRS Insights" ] }