In 2018, the Trump Administration imposed additional tariffs of 25 percent on steel imports and 10 percent on aluminum imports from certain countries under Section 232 of the Trade Expansion Act of 1962, as amended. Citing concerns that foreign steel and aluminum imports were entering the United States in quantities and conditions that might “impair the national security of the United States,” the President levied these tariffs with the stated goal that domestic producers’ capacity utilization would stabilize at or above an 80 percent capacity utilization target level.

On January 24, 2020 – noting that the 80 percent target had not been achieved – President Trump issued Presidential Proclamation 9980 announcing that effective February 8, 2020, the existing Section 232 tariffs on aluminum and steel imports will also apply to certain derivative products of aluminum and steel as described in Annex I and Annex II of the proclamation. The tariffs will extend to derivative products in part because “foreign producers of these derivative articles have increased shipments of such articles to the United States to circumvent the duties on aluminum articles and steel articles.” The proclamation also states that the derivative products have shown a recent history of increased imports, and that the metals account for at least two-thirds of the product’s cost.

The expanded scope of the Section 232 tariffs

The expanded Section 232 tariffs will take effect for all affected articles entered or withdrawn from a warehouse for consumption on or after 12:01 am EST, on February 8, 2020. The steel derivatives tariffs will apply to imports from all counties except Argentina, Australia, Brazil, Canada, Mexico, and South Korea. The aluminum derivatives tariffs will apply to imports from all countries except Argentina, Australia, Canada, and Mexico.

The expanded tariffs on steel derivative products will affect products classified under the following subheadings of the Harmonized Tariff Schedule of the United States (HTSUS):

  • Nails, tacks (other than thumb tacks), drawing pins, corrugated nails, staples (other than those of heading 8305) and similar articles, of iron or steel, whether or not with heads of other material (excluding such articles with heads of copper), suitable for use in powder-actuated handtools, threaded (described in subheading 7317.00.30)
  • Nails, tacks (other than thumb tacks), drawing pins, corrugated nails, staples (other than those of heading 8305) and similar articles, of iron or steel, whether or not with heads of other material (excluding such articles with heads of copper), of one piece construction, whether or not made of round wire; the foregoing described in statistical reporting numbers 7317.00.5503, 7317.00.5505, 7317.00.5507, 7317.00.5560, 7317.00.5580 or 7317.00.6560 only and not in other statistical reporting numbers of subheadings 7317.00.55 and 7317.00.65
  • Bumper stampings of steel, the foregoing comprising parts and accessories of the motor vehicles of headings 8701 to 8705 (described in subheading 8708.10.30) and
  • Body stampings of steel, for tractors suitable for agricultural use (described in subheading 8708.29.21).

The expanded tariffs on aluminum derivative products will affect products classified under the following HTSUS subheadings:

  • Stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and with steel core, not electrically insulated; the foregoing fitted with fittings or made up into articles (described in subheading 7614.10.50)
  • Stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and not with steel core, not electrically insulated; the foregoing comprising electrical conductors, not fitted with fittings or made up into articles (described in subheading 7614.90.20)
  • Stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and not with steel core, not electrically insulated; the foregoing not comprising electrical conductors, not fitted with fittings or made up into articles (described in subheading 7614.90.40)
  • Stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and not with steel core, not electrically insulated; the foregoing fitted with fittings or made up into articles (described in subheading 7614.90.50)
  • Bumper stampings of aluminum, the foregoing comprising parts and accessories of the motor 15 vehicles of headings 8701 to 8705 (described in subheading 8708.10.30) and
  • Body stampings of aluminum, for tractors suitable for agricultural use (described in subheading 8708.29.21).

Based on International Trade Commission data on 2018 imports into the United States, the expanded 25 percent tariff on steel derivative products are expected to affect imports with a total annual value of approximately $800 million. The additional 10 percent tariff on aluminum derivative goods is expected to affect imports with total annual value of approximately $20 million.

Product exclusion process

The Proclamation authorizes the Department of Commerce to establish a process for requesting exclusions from the expanded tariffs for affected parties located inside the United States. Exclusions may be granted (1) “for any derivative article determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality,” and also (2) “based upon specific national security considerations.” Any granted exclusion will be retroactive to the date that the request was accepted by the Department of Commerce.