New 301 Tariff Update/China Delays Update
FOR IMMEDIATE RELEASE:
New 301 Tariff Update/China Delays Update
January 31, 2020
Dear Valued Customer;
On January 24, 2020, President Trump signed a declaration for an expansion of the Tariffs on Aluminum and Steel products that is noted in Annex I and Annex II respectively. These are covered under the previously implemented tariffs ordered under Section 232 and 301.
If you click on the link below, you can see the full explanation of the intent to protect the United States Aluminum and Steel Industries and to protect US national security interests.
An additional duty on steel nails of 25% is scheduled to be implemented on entries into U.S. ports as of 12:01am on February 8th, 2020. This is on top of any tariff that may be currently in place. The additional tariffs added under Section 232 (10% on aluminum and 25% on steel) are being added to specific derivative products of aluminum and steel imported from all countries that are not exempted from this action (see exempt countries below).
• Exempt from additional steel tariffs – Argentina, Brazil, Canada, Mexico, S. Korea
• Exempt from additional aluminum tariffs – Argentina, Australia, Canada, Mexico
The additional tariff of 25% will impact a number of fastener categories as they are defined as derivative products (or down-stream products) of steel. We do not expect the US capacity for some of these nail types to be sufficient to meet demand in the categories that will be impacted. We do see that availability and pricing may be impacted significantly for some time to come.
Roofing Nail Impact: Roofing nails will not be impacted by this additional 25% tariff, though other roofing and construction related fasteners will. At this time, the declaration clearly does note that there are 6 countries that are exempted, and those are the ones that have recent trade deals in place with the United States. Mexico, Canada, South Korea, Argentina, Australia and Brazil are exempt.
We also believe that this is another way the government may be trying to stop all of the rampant cheating of nails being transshipped to avoid their legal obligations of duty and tariff. This situation is very fluid and we will continue to monitor it to bring you accurate information. In the meantime, please see the wording below* that we will be including on all nail quotes and order acknowledgments.
Coronavirus Impact on China Nails: The coronavirus has created uncertainty regarding materials produced in and shipped from China. The traditional Lunar New Year holiday, where hundreds of millions of people crisscross China to be with family, has been extended for several days while the Chinese government grapples with the coronavirus health scare. In addition, many employers are now planning to delay the expected start date for many mills until February 9th to support the effort to minimize the spread of the virus. Depending on how this issue evolves, we will need to consider that matter and that extended delays of shipping product to the United States may occur. We will keep you informed of timing and changes as they happen.
*CMI Order Acknowledgements: Our current nail quotes for material from China include a 25% tariff. In the spirit of continued transparency, we will continue to quote all tariff applicable nails listing the 25% tariff. If an additional 25% tariff is implemented on certain products, from specific affected countries, it will be added to your material cost of those products. Be reminded that the tariff percentage is only applied to the material cost of the product and that’s how we will continue to handle it.
Continental Materials, Inc. (CMI) is a national supplier of roofing system component materials and known for BUR (built-up roofing) asphalt with “No Smell”™ odor eliminating technology and its WeatherSeal™ protective packaging, All-Weather™ asphalt felts and coated organic rolls, CMI All-Weather™ modified bitumen rolls, SureGrip™ construction fasteners and roofing nails, Continental’s eco-friendly high density fiberboard roof insulation board and a premium line of SecureGrip™ synthetic roof underlayment products that are sold and used widely throughout the country. CMI has provided value added products and superior service to the roofing industry since 1958.
For more information on CMI products, call (215) 884-4930, visit our website or contact your local CMI Sales Representative.