Hello, I’m Bob Cowie – VP of Consulting at GHY International. Today we’re hear to talk about the steel wars.
As of March 23, 2018 the US assessed additional duties on imports of steel and aluminum products under Section 232 of the Trade Expansion Act of 1962. These duties placed an additional 25% on certain steel products and an additional 10% on certain aluminum products. Canada, Mexico, Argentina, Australia, Brazil and South Korea were exempt of these duties pending further review.
On June 1, 2018 the United States announced that all countries except Argentina, Australia,, Brazil and South Korea would be subject to the 25% additional duties on certain steel products and all countries other than Argentina and Australia would be subject to the additional 10% on certain aluminum products.
In response to this announcement Canada issued Customs Notice 18-08 imposing surtaxes on certain goods imported from the United States effective July 1, 2018. The Notice however does provide a relief mechanism for importers who manufacture products from these articles and export them. This relief is available either through the Duties Relief Program or the Duty Drawback Program. It must be noted that there is no such mechanism for relief for US manufacturers under the Section 232 provision.
So let's examine a bit further. For importers who purchase their own product and are already part of the Duties Relief Program the process is much the same as currently in place. However, there are some situations where these importers also purchase product from other importers and in order to recover these duties will need to secure documentation from the importer - Customs From K32A - to allow them to recover the duties. Since these duties would have already been paid the recovery mechanism would need to be done by way of Duty Drawback. In addition many companies would have no need to be part of any Duties Relief Program since the majority of the steel and aluminum materials were duty free regardless of origin. Thus the only mechanism available would be the Duty Drawback program.
The Duty Drawback Program is closely and carefully audited by the CBSA. One must be able to provide full linkages from purchase order right to export of the product. Not being able to support your claim for refund can lead to penalties and denial of refund.
Needless to say this war is creating chaos for many companies and one must carefully explore all options available to protect their bottom line and stay competitive. Communication with your supplies and service providers has never been more important.
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