Context & Legal Foundation IFFCBANO 2018 Int’l Trade Symposium US Trade Actions Context & Legal Foundation Edward T. Hayes, Esq. Leake & Andersson L.L.P. 1100 Poydras Street, Suite 1700 New Orleans, LA 70163 504-585-7500 ehayes@leakeandersson.com

US Trade Actions-Context President Trump—changing course of US trade policy Reciprocity & Trade Deficit main themes US is most open/transparent market in the world Prior US trade policy—market opening and non-tariff barriers 2 | www.leakeandersson.com

US Trade Actions-Context Now redrawing agreements and clawing back concessions in two areas International: NAFTA, WTO & FTAs (KORUS) Domestic focus: US trade laws allowing unilateral action Department of Commerce AD/CVD Self Initiation (alloy aluminum sheet from China) Current focus on actions under Sections 232 and 301 of Trade Laws 3 | www.leakeandersson.com

Section 232- Steel & Aluminum Tariffs Section 232 (Trade & Expansion Act of 1962): If DOC “finds that an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security. . . “ President may take actions deemed necessary to adjust imports 1980 President Carter imposed fee on imported oil Department of Commerce ruled that imports of steel & aluminum impairing US national security 4 | www.leakeandersson.com

Section 232 Steel & Aluminum Tariffs March 8, 2018 President Trump imposed 25% tariff on steel imports and 10% on aluminum products Collections began March 23, 2018 Target Steel Products: USHTS 7201: Primary Materials in Granular or Powder USHTS 7206: Iron and Nonalloy Steel USHTS 7218: Stainless Steel USHTS 7224: Other Alloy and Nonalloy Steel Bars & Rods 5 | www.leakeandersson.com

Section 232 Steel & Aluminum Tariffs Target Aluminum Products: USHTS 7601: Unwrought Aluminum USHTS 7604: Bar, Rods and Profiles USHTS 7605: Wire USHTS 7606 & 7607: Plate, Sheet, Strip, and Foil (flat rolled) USHTS 7608 & 7609: Tubes and Pipes (plus pipe fitting) USHTS 7616.99.51.60 & 7616.99.51.70: Castings and Forgings 6 | www.leakeandersson.com

Section 232 Steel & Aluminum Tariffs Country exclusions: NAFTA & EU (temporary); Australia, Argentina, South Korea & Brazil Product exclusions allowed through administrative process at Department of Commerce (8,000 requests) 7 | www.leakeandersson.com

Section 232 Steel & Aluminum Tariffs China retaliation notified to WTO on March 29, 2018 Target agricultural goods in politically sensitive areas Fresh Fruits, Dried Fruits & Nuts (15%) Grape Wine (15%) Iron and Steel Tubes and Pipes (15%) Pork Meat (25%) Already enacting non-tariff retaliation-100% inspections of US fresh fruit causing delays 8 | www.leakeandersson.com

Section 232 Steel & Aluminum Tariffs 9 | www.leakeandersson.com

Section 232 Steel & Aluminum Tariffs China initiated WTO dispute settlement alleging action violates WTO Safeguards Agreement US asserts National Security Exception-Article XXI WTO members may take any action “necessary for the protection of its essential security interests . . .” 10 | www.leakeandersson.com

Section 301-China Intellectual Property Section 301-President may modify tariff rates where: (1) US rights under a trade agreement denied; or (2) act, policy or practice of foreign country [a] violates a trade agreement, or [b] unjustifiably burdens or restricts US commerce USTR report & Presidential Memo (March 28, 2018) China’s practices: (1)forced technology transfer; (2) restrictive licensing terms; (3)direct US investment to obtain important US technology; and (4) direct IP theft 11 | www.leakeandersson.com

Section 301-China Intellectual Property USTR list of proposed tariffs published April 6, 2018 Public hearing on May 15, 2018 Proposed list imposes 25% tariff on 1,300 separate tariff lines seeking $50 billion in offsets Primarily target products benefitting from Chinese industrial policies (chemicals, steel and aluminum products, engines, ag machinery, electronics, marine equipment) 12 | www.leakeandersson.com

Section 301-China Intellectual Property China announced proposed retaliation of 25% tariff on US soybean, airplane and automobile exports (matching equivalent $50 billion number) US launched WTO dispute settlement case on China policies US and China engaged in talks for bilateral solution 13 | www.leakeandersson.com

Conclusions Trade actions part of course change by President Trump View tariffs and new trade policy as part of business’ political and economic risk assessment Diversity in supply chains and markets critical now more than ever 14 | www.leakeandersson.com