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MemoMemorandumClinton · D Quiet signal

Presidential Memorandum

Action Under Section 203 of the Trade Act of 1974 Concerning Steel Wire Rod

President Clinton imposed a 3-year tariff-rate quota on steel wire rod imports, with over-quota duties of 10%, 7.5%, and 5% in successive years, based on a split USITC finding of serious injury to the domestic industry. Canada and Mexico were excluded from the safeguard measure under NAFTA provisions.

Federal Register Open PDF 65 FR 8629

Impact dates

  1. 3-year and 1-day relief period ends

  2. USITC midpoint monitoring report under section 204

  3. TRQ takes effect; Secretary of Treasury to seek HTS statistical subdivisions for excluded products

Key directives

  • Establish tariff-rate quota of 1.58 million net tons for year 1 (March 1, 2000 – February 28, 2001)
  • Increase TRQ amount by 2% annually in years 2 and 3
  • Set over-quota duties at 10%, 7.5%, and 5% ad valorem for years 1-3
  • Apply quarterly distribution rule for in-quota quantities
  • Instruct Secretary of Treasury to publish weekly import statistics
  • Instruct Secretary of Treasury to seek HTS statistical subdivisions for excluded products by March 1, 2000
  • Instruct Secretary of Treasury to monitor excluded products and Canada/Mexico imports quarterly
  • Instruct USTR to request USITC section 332(g) study on effects on domestic industry and principal users
  • Direct USTR to publish memorandum in Federal Register

Who is ordered

Timeline

Immediate

  • tariff-rate quota proclamation issued
  • exclusion of Canada and Mexico from safeguard

Near term (90d)

  • TRQ takes effect March 1, 2000
  • Secretary of Treasury to seek HTS statistical subdivisions by March 1, 2000
  • weekly import statistics publication begins

Long term

  • 3-year and 1-day relief period (through February 28, 2003)
  • USITC midpoint monitoring report due ~August 2001
  • USITC section 332(g) report on effects to domestic industry and wire rod users

Risks & tensions

  • Split USITC finding (equally divided commissioners) creates legal vulnerability to WTO challenge
  • Quarterly distribution mechanism may create import surges in Q4, undermining relief effectiveness
  • Exclusion of Canada and Mexico under NAFTA may shift injury to other trading partners or create transshipment incentives
  • 2% annual TRQ growth and declining over-quota duties provide limited long-term protection
  • Vague: exact date for USITC section 332(g) report not specified, only 'in conjunction with' midpoint report
Presidential Memorandum: Action Under Section 203 of the Trade Act of 1974 Concerning Steel Wire Rod · Executive Orders