September 18, 2024 – The US government yesterday announced a legislative initiative to amend the existing de minimis shipments rules for imports into the United States. This includes potential new rules for products affected by the steel and aluminum tariffs in the Section 232 measures. And in the United States, the Fed is expected to make another interest rate decision today.
USA: Interest rate decision expected today
The Fed will announce its interest rate decision in the USA this evening. An interest rate cut is considered a foregone conclusion – whether by 0.25 or 0.5 percentage points remains questionable. While the priced-in probability of a major interest rate move on the futures markets was still below 20 percent in the middle of last week, this had risen to almost 70 percent by yesterday.
There was hardly any hard data during this period. The main reasons for pricing in a higher interest rate hike are likely to have been newspaper articles by well-known journalists as well as a speech by former New York Fed Chairman William C. Dudley and a position taken by former Dallas Fed Chairman Robert S. Kaplan, who all spoke in favor of it.
However, a major interest rate hike is not yet certain. Regardless of the Fed’s decision today, a cut is likely to lead to more activity, volatility and demand on the markets.
Section 232: US government plans changes to de minimis shipments
Yesterday, the US government announced that it intends to adjust the de minimis shipment rules or even suspend them altogether for some imports. De Minimis Shipments apply to imports into the United States with a value of $800 or less. The justification states, among other things, that de minimis shipments are imported into the United States with less information than other imports and are not subject to duties and taxes.
Legislative initiative to suspend the de minimis exemption for S232 imports
An important point in the announcement is to launch a legislative initiative to suspend the de minimis exemption for imports containing products subject to duties imposed under Section 201 or 301 of the Trade Act of 1974 or Section 232 of the Trade Expansion Act of 1962. This includes all items covered by the Section 232 measures on steel and aluminum.
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