President Trump issued Feb. 10 separate proclamations that direct a number of actions to broaden and increase Section 232 tariffs on imports of steel and aluminum and derivative products.
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(Please note that the information in this article represents ST&R’s best interpretation of the proclamations as of press time.)
Additional tariffs of 25 percent on imported steel, and 10 percent on imported aluminum, were imposed effective June 1, 2018, with respect to nearly all countries. The U.S. later imposed tariff-rate quotas suspending these tariffs on a set volume of steel and aluminum products imported from the European Union, Japan, and the United Kingdom and suspended the steel tariffs for Ukraine through June 1, 2025.
The tariffs were extended to certain derivatives of steel and aluminum articles as of Feb. 8, 2020, though there were exceptions for Argentina, Australia, Brazil, Canada, the EU, Japan, Korea, Mexico, and the UK for derivatives of steel and for Argentina, Australia, Canada, the EU, Mexico, and the UK for derivatives of aluminum.
However, the new proclamations assert that imports of steel and aluminum and derivative products have continued to increase despite the tariffs, that there have been numerous efforts to evade the tariffs, and that existing exclusions exempt a significant volume of imports from the tariffs. In addition, countries with alternative arrangements have not cooperated sufficiently on issues like China’s excess capacity, trade remedies, customs matters, and trade monitoring.
The president has therefore announced that the following changes to the steel and aluminum tariffs will be effective as of 12:01 a.m. EDT on March 12.
- The 25 percent Section 232 tariff on steel and steel derivative articles will be extended to imports from all countries.
- The 10 percent Section 232 tariff on aluminum and aluminum derivative articles will be increased to 25 percent and extended to imports from all countries.
- These tariffs will be extended to additional derivative articles (which will be identified in annexes to the proclamations that had not been published at press time, and a process for further expansion will be established), with exceptions for those processed in another country from steel articles melted and poured, or aluminum articles smelted and cast, in the U.S.
- The alternative agreements for Argentina, Australia, Brazil, Canada, the EU, Japan, Mexico, South Korea, Ukraine, and the UK will be terminated.
- All existing general approved exclusions from the tariffs will be terminated (though granted product exclusions will remain in effect until their expiration date or until their excluded volume is imported, whichever occurs first, and the process for requesting exclusions has been terminated as of Feb. 10).
However, both proclamations include language suggesting that tariffs on derivative articles will not take effect until the Department of Commerce provides public notification that adequate systems are in place to fully, efficiently, and expediently process and collect associated tariff revenue, though it is unclear which articles this suspension will apply to.
Further, the proclamations direct U.S. Customs and Border Protection to:
- implement as soon as practicable regulations or guidance requiring importers to provide CBP with any information necessary to identify the steel or aluminum content used in the manufacture of imported steel or aluminum derivative articles covered by these proclamations;
- prioritize reviews of the classification of covered imports and, if misclassification resulting in non-payment of the Section 232 tariffs is discovered, assess monetary penalties in the maximum amount permitted by law (the steel proclamation directs CBP to not consider any evidence of mitigating factors, which appears to contradict existing CBP regulations); and
- promptly notify the Department of Homeland Security of evidence of any efforts to evade the tariffs through processing or alteration prior to importation (DHS may then consider such articles for inclusion as derivative steel articles subject to the tariffs).
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