Tariffs remain the favored tool of international pressure in the Trump Administration, having put several waves of tariffs tallying in the billions into effect these last few months. These sweeping declarations have targeted commodity categories and imports from specific countries.
One of the recent targets for this has been NATO member Turkey. The imposition of these new tariffs has come out of the administration’s protest of the detention of American Andrew Brunson. Brunson has been detained by the Turkish government for allegedly participating in a coup attempt against President Recep Tayyip Erdogan, but the Trump administration has demanded his release and return. Erdogan refused, and in response the US government added additional duties to some of their major exports to the USA.
Earlier this year, duties were placed on all imports of steel and aluminum into the USA from around the world at a rate of 25% and 10%, respectively. These used a “section 232” justification, meaning it was vital to national security. This reasoning was again invoked for the tariff increases for Turkish imports, doubling the earlier rates to 50% for steel and 20% for aluminum.
Turkey has responded by raising tariffs on their primary American imports, but their ability to make a sizeable dent in the US economy is significantly reduced by their size and their own devaluing currency that gives Erdogan less leeway to raise prices on an already squeezed populace.
This is another example of how tariffs are being more frequently employed as not just a tool to push for fairer trade, but a political weapon that can leverage the strength of the US market to bring economic pressure. While Turkey has remained unmoved as of yet on their detention of the American prisoner in question, it remains to be seen how long they can hold out with their internal economy struggling.
Unfortunately for steel and aluminum importers in the USA, these section 232 tariffs are not eligible for duty drawback. This means that it’s a set cost on any importer that can’t be refunded later, unlike the 301 tariffs imposed on Chinese imports. This will only increase the effect they have on any company that currently uses Turkey as a source for metal products.
If you have any questions on whether your products will be subject to these duties, please contact our VP of Sales Andrew Galloway at agalloway@jmrodgers.com or 973-726-5340.
