Trump Administration Revamps Section 232 Metal Duties, Bringing Clarity and New Complexity to Tariffs on Derivative Products | Pillsbury - Global Trade & Sanctions Law - JD Supra

The Trump administration significantly expanded the scope of Section 232 tariffs on steel and aluminum, introducing new duties on certain derivative products. This move, announced on January 24, 2020, through Proclamation 9980, aimed to prevent the circumvention of existing tariffs by applying additional duties to goods made from previously tariffed metals. Importers and trade compliance professionals must understand these changes to ensure ongoing compliance and manage potential cost increases.

This expansion directly affects importers of specific steel and aluminum derivative products. For steel, the new 25% ad valorem duty applies to certain nails, tacks, drawing pins, corrugated nails, and staples (under HTSUS 7317.00.30, 7317.00.50, 7317.00.60), as well as stranded wire, ropes, cables, plaited bands, slings, and similar products of steel not electrically insulated (under HTSUS 7312.10.30, 7312.10.50, 7312.10.70, 7312.90.00), and bumper stampings of steel (under HTSUS 8708.10.30). For aluminum, a 10% ad valorem duty now covers aluminum automotive parts (under HTSUS 8708.99.65), aluminum wire (under HTSUS 7614.10.50, 7614.90.20, 7614.90.40), and aluminum cables (under HTSUS 7614.10.10, 7614.90.30, 7614.90.60).

The additional duties of 25% for steel derivative products and 10% for aluminum derivative products became effective at 12:01 a.m. Eastern Standard Time on February 8, 2020. It is important to note that the existing exclusion process for Section 232 tariffs on steel and aluminum will also apply to these newly covered derivative products. This means that products for which an exclusion has been granted, or for which an exclusion request is pending with the Department of Commerce, will not be subject to these additional duties. Importers who believe their products should be exempt based on specific criteria may still pursue this avenue.

Given these changes, importers, customs brokers, and trade compliance officers should take immediate action. It is crucial to:

• Review Product Classifications: Carefully examine your imported products and their Harmonized Tariff Schedule of the United States (HTSUS) classifications to determine if any fall under the newly tariffed steel or aluminum derivative categories.
• Assess Supply Chains: Understand the origin and composition of your products to identify potential impacts on costs and sourcing strategies.
• Consider Exclusion Requests: If your products are now subject to these duties, evaluate whether they meet the criteria for an exclusion and consider filing a request with the Department of Commerce.
• Consult Experts: Engage with experienced trade counsel or compliance professionals to navigate the complexities of these expanded tariffs and ensure adherence to all regulations.

Proactive measures are essential to mitigate risks and maintain compliance in light of these significant adjustments to Section 232 duties.