Key Takeaways
- Modifications to Section 232 duties on steel and aluminum and their derivatives will take effect on March 12, 2025.
- Steel products already subject to 25% Section 232 duties will not be subject to additional duties; aluminum products currently subject to 10% Section 232 duties will be subject to the higher duty rate of 25%.
- Country-specific exemptions and product-specific exclusions are eliminated.
In March 2018, President Donald J. Trump invoked Section 232 of the Trade Expansion Act of 1962, as amended (19 U.S.C. 1862), to impose duties on imports of steel (25 percent ad valorem) and aluminum (10 percent ad valorem) due to national security concerns (“Section 232 duties”).
On Feb. 10, 2025, President Trump signed two executive orders modifying the existing Section 232 duties on steel and aluminum, significantly expanding the scope of these duties. Most of the changes, as summarized below, will take effect at 12:01 am EDT on March 12, 2025.
Across-the-Board 25 Percent Duty Rate. The new executive orders impose a flat 25 percent duty rate on any subject steel and aluminum product from any country. Steel products already subject to 25 percent Section 232 duties will not be subject to additional duties under the new executive order. Aluminum products currently subject to 10 percent Section 232 duties will be subject to the higher duty rate of 25 percent starting March 12, 2025.
Russia Exception. Any aluminum articles or derivatives of aluminum that use smelt or cast primary aluminum from Russia continue to be subject to the 200 percent duties previously imposed.
No More Country-Specific Exemptions. The existing exemptions, quotas and tariff-rate quotas for steel imports from Argentina, Australia, Brazil, Canada, EU countries, Japan, Mexico, South Korea, Ukraine and the UK, as well as for aluminum imports from Argentina, Australia, Canada, Mexico, EU countries and the UK, will end on March 12, 2025.
No More Product-Specific Exclusions. The Department of Commerce (DOC) already has suspended the process for companies to request product-specific exclusions from Section 232 duties. Granted exclusions remain valid through their specific expiration dates. Pending requests for exclusion are void. All existing general approved exclusions will be terminated on March 12, 2025.
Scope Expansion. Effective March 12, 2025, the scope of Section 232 duties will be expanded to encompass derivative steel and aluminum articles that are not currently subject to these duties. Products considered derivative articles subject to duties have not yet been specified; the initial lists of subject derivative articles will be announced soon in the Federal Register. The information available at this time is as follows:
- By May 12, 2025, DOC must create a new process for domestic producers or industry associations to request that specific imported products be considered derivative articles.
- Derivative articles processed in another country from steel or aluminum that were melted and poured (steel) or smelted and cast (aluminum) in the U.S. are not subject to Section 232 duties.
- For any derivative steel article not listed in Chapter 73 of the Harmonized Tariff Schedule (HTS) and any derivative aluminum article not listed in Chapter 76 of the HTS, the 25 percent duty will apply only on the steel or aluminum content of the respective article.
Foreign Trade Zone (FTZ) and Duty Drawback. Steel and aluminum articles and their derivatives must generally enter FTZs under “privileged foreign status” and will be subject to Section 232 duties when entered into the U.S. for consumption on or after March 12, 2025. No duty drawback will be available for Section 232 duties.
Reporting and Enforcement. All imported steel and aluminum articles and derivatives must identify their country of origin using the “melted and poured” or “smelted and cast” standard. U.S. Customs and Border Protection will soon provide guidance on reporting requirements and prioritize reviewing classifications to prevent misclassification and duty evasion.
As noted, the 25 percent across-the-board Section 232 duty rate is scheduled to take effect on March 12, 2025. Various foreign governments have initiated discussions with the U.S. government in an effort to prevent the imposition of these duties on imports from their respective countries. As a result of these ongoing negotiations, the implementation of the duties might be paused, postponed or canceled. Given the rapidly evolving trade landscape in the U.S., it is crucial for companies to closely monitor these developments and adopt proactive measures to prepare for potential changes.
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