Here’s What Importers Need to Know About the US’s New Steel & Aluminum Tariffs

On March 8, 2018, President Trump signed Presidential Proclamations on steel and aluminum following the recommendations presented by the Department of Commerce.  Broadly, the actions will apply import tariffs of 25% on steel and 10% on aluminum. The legal basis for doing so is Section 232 of the Trade Expansion Act of 1962, as amended to offset the effects on national security due to alleged unfair trading practices that “weakened our national economy”.

The tariffs will be applied to all countries except Canada and Mexico. Other countries may potentially be exempted. According to the Proclamations, countries that have a “security relationship” with the U.S. may offer alternatives to address the matter. If, in the judgment of the Administration, there ceases to be a threat to the U.S. national security, the duties for those countries will be removed or modified. The exemption of Canada and Mexico is based on “continued ongoing discussions”; i.e., a successful conclusion to the NAFTA renegotiations, which just concluded a 7th round of talks, plus the expectation that Canada and Mexico will take action to prevent transshipments.

Additionally, the Secretary of Commerce, in consultation with Executive Branch officials, is authorized to provide relief from the additional duties for any steel or aluminum articles determined not to be produced in the U.S. in a sufficient and reasonably available amount or of a satisfactory quality and is also authorized to provide such relief based on specific national security considerations.

Such relief shall be provided for an article only after a request for exclusion is made by a directly affected party located in the United States. If the Secretary determines that a particular article should be excluded, the Secretary shall, upon publishing a notice of such determination in the Federal Register, notify Customs and Border Protection (CBP) of the Department of Homeland Security concerning such article so that it will be excluded from the duties described in the proclamations.

Within 10 days after the date of this proclamation, the Secretary shall issue procedures for the requests for the exclusion. The Secretary of Commerce is directed to continue to monitor imports of steel and aluminum and in consultation with the Executive Branch review the status with respect to national security.

STEEL

The 25% tariff will be applied to “steel articles” falling in the following six-digit Harmonized Tariff Schedule (HTS) classifications:

  • 7206.10 through 7216.50,
  • 7216.99 through 7301.10,
  • 7302.10, 7302.40 through 7302.90, and
  • 7304.10 through 7306.90

ALUMINUM

The 10% tariff will be applied to “aluminum articles” falling in the following HTS classifications:

  1. Unwrought aluminum (HTS 7601);
  2. Aluminum bars, rods, and profiles (HTS 7604);
  3. Aluminum wire (HTS 7605);
  4. Aluminum plate, sheet, strip, and foil (flat rolled products) (HTS 7606 and 7607);
  5. Aluminum tubes and pipes and tube and pipe fitting (HTS 7608 and 7609); and
  6. Aluminum castings and forgings (HTS 7616.99.51.60 and 7616.99.51.70

To apply these tariffs, subchapter III of chapter 99 of the HTSUS is modified as provided in the Annex to the proclamation. Pending any further exemptions or amendments, the duties will become effective on or after 12:01 a.m. eastern daylight time on March 23, 2018.

Importers of steel and aluminum should take the following next steps:

  • Evaluate your immediate and potential duty exposure for the tariffs described above.
  • Make sure the analysis can be amended as necessary to allow for further exemptions or exclusions or the possibility that Canada or Mexico may be impacted in the future.
  • For affected articles of steel and aluminum, evaluate the potential to make the case that those materials are not available or are in short supply from U.S. sources.
  • Be ready to immediately apply for the exclusion of these items when the procedures are published.
  • For affected articles of steel and aluminum available in the U.S., consider the viability to source those items domestically.
  • Lend support to trade associations, lobbyists, and other countries to apply for exemptions and exclusions.
  • Consider the potential to modify and/or combine products for import such that the HTS classification no longer falls under these proclamations.
  • Double-check that the articles falling in the affected HTS provisions are correctly classified.
  • Ensure your broker is prepared to compliantly apply the Chapter 99 provisions for affected articles of steel and aluminum.