Yesterday, March 8, 2018, President Trump formally announced and signed the proclamations to impose tariffs on steel and aluminum imports pursuant to Section 232 of the US Trade Expansion Act of 1962. There are many details yet to be released, but the following are the key provisions from the Proclamations:
1. Worldwide Tariffs on All Countries (Except as Noted Below):
- 10% on aluminum imports; and
- 25% on steel imports
- These tariff rates would be in addition to any antidumping or countervailing duty collections applicable to any product.
2. Country Exclusions
- The tariffs do not apply to Canada and Mexico “at this time”; this is tied to the NAFTA negotiations.
- The President will consider proposals by any country “with which we have a security relationship” on alternative ways to address the national security concerns caused by imports from that country. USTR is in charge of this process. This could result in a removal or reduction of the tariffs with respect to that country/those countries.
3. Products Affected
The list of covered products identified by specific tariff provisions as set forth in the steel and aluminum proclamations are the same tariff provisions as were specified in the Section 232 steel and aluminum reports sent by the Commerce Department to the President and as we reported in our earlier alert. The list of covered products is subject to any changes made in the forthcoming Annex.
Today, US Customs and Border Protection announced its intention to update the Automated Commercial Environment (ACE) system with the new HTS records no later than close of business Tuesday, March 13, 2018.
Additional tariffs will be imposed on imports of steel mill products, which are defined at the Harmonized System (“HTS”) 6-digit level as: 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90, including any subsequent revisions to these HTS codes.
The Proclamation references an Annex which will include the specific HTS numbers.
Additional tariffs will be imposed on imports of the following categories of products:
- unwrought aluminum (Harmonized Tariff Schedule (HTS) Code 7601);
- aluminum bars, rods and profiles (HTS Code 7604);
- aluminum wire (HTS Code 7605);
- aluminum plate, sheet, strip, and foil (flat rolled products) (HTS Codes 7606 and 7607);
- aluminum tubes and pipes (HTS Code 7608) and aluminum tube and pipe fittings (HTS Code 7609)
- aluminum castings and forgings (HTS Codes 76184.108.40.206 and 76220.127.116.11);
including any subsequent revisions to these HTS codes.
- Effective date when duties go into effect: in 15 days, i.e. imports entered into the United States on or after 12:01am on March 23, 2018.
- Duration: there is no set duration for these remedies. The Proclamation states that Commerce will monitor the imports and review the status of such imports with respect to national security.
5. Exclusion Process
The Proclamation provides for an exclusion process by which affected US parties (such as importers) could seek an exclusion from the tariffs. Exclusions would be granted (i) for any steel / aluminum product determined not to be produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality; or (ii) based upon specific national security considerations.
This exclusion process would be handled by the Commerce Dept. Within 10 days after the date of this proclamation, Commerce shall issue procedures for the requests for exclusion. We expect these procedures will include the deadlines to apply for exclusions and information to be provided. The two proclamations are available here and here.
We will provide further details as additional guidance is released. We anticipate trading partners will impose retaliatory tariffs shortly after the 232 tariffs go into effect, while at the same time looking to negotiate country–wide exclusions by making commitments to reduce imports, eliminate Chinese content, or other measures. Importers of special steel products should begin to gather support for a product exclusion, once the process is announced. In addition, importers should review their compliance programs in anticipation of increased and vigorous enforcement at the border.