ST&R Update on Steel and Aluminum Tariffs

ST&R Update on Steel and Aluminum Tariffs

The following analysis was provided by NCBFAA Customs Counsel Lenny Feldman and Legislative Advisor Nicole Bivens Collinson. both of Sandler, Travis & Rosenberg, P.A.

On March 12, 2025, all countries will be subject to the 25% tariffs on Steel and Aluminum products and specified derivative products imported into the United States.   

An expanded list of derivative products yet to be specified, will also be subject to the tariffs, but it appears that the effective date of those tariffs is dependent upon the Secretary of Commerce notifying that an adequate system is in place to fully, efficiently and expediently process and collect the tariffs for the covered articles. As soon as the Annexes listing the expanded derivatives products is available, we will share it.

For Steel, any derivative product in the Annex that is not classified in Chapter 73 of the HTSUS, the additional duty shall only apply to the steel content of the derivative steel article. For Aluminum, any derivative product in the Annex that is NOT classified in chapter 76 of the HTSUS, the additional 25% shall apply only to the aluminum content of the derivative article. Further, for Aluminum products and derivatives, if the primary aluminum is origin Russia, the duty rate shall be 200%. Primary aluminum is defined as new aluminum metal that is produced form alumina (or aluminum oxide) by the electrolytic Hall-Heroult process. 

However, if the derivative steel product made in another country is made from steel that was melted and poured in the US, and if certification can be provided to CBP demonstrating the melt and pour requirement has been met, the derivative product regardless of origin will NOT be subject to the additional duty. Similarly for aluminum, importers shall provide CBP any information necessary to identify the aluminum content used in the manufacture of aluminum derivative articles. In both instances, CBP will publish guidance or regulations on the required documentation as soon as practicable.  

All previous Steel and Aluminum agreements with trading partners including Argentina, Australia, Brazil, Canada, EU, Japan, Mexico, S. Korea, Ukraine, the U.A.E., or the UK are cancelled effective March 12. For Steel products and derivatives from Turkey a 50% tariff will be applied.  

No exclusions or exemptions will be issued effective February 11, and all generally approved exclusions shall terminate on March 12. However, if an importer has an existing exclusion for steel or aluminum products, the Commerce Department has issued a notice that the exclusion is effective until the expiration date or until their excluded volume is exhausted, whichever occurs first.  

The Commerce Department is directed to, within 90 days, develop a process for including additional products to be subject to the tariffs and added to the Annexes for both steel and aluminum products and derivatives. Domestic Steel or Aluminum producers or industry associations representing steel products producers can petition the Commerce Department to add a product to the list. Commerce will make a determination within 60 days of the request whether to add it to the Annex.  

No duty drawback will be allowed on these tariffs.

Further, it directs CBP to prioritize reviewing classification of steel and its derivative products and directs CBP to issue penalties without consideration of mitigating factors if it finds such products misclassified in a manner than avoids the additional tariffs. As a penalty, mitigation and settlement processes all are statutorily recognized, the implementation of the Proclamation in this regard may give rise to judicial challenge.

Notably, the Aluminum proclamation is a bit different, CBP is directed to prioritize reviewing classification of aluminum articles and derivative aluminum articles and to assess monetary penalties in the maximum amount permitted by law in the event that it discovers misclassification of goods to avoid the duties.

Steel and aluminum products or their derivatives subject to these tariffs admitted into a foreign trade zone on or after 12:01 am March 12 – unless eligible for admission under “domestic status” must be admitted as “privileged foreign status” and will be subject to the duties upon entry for consumption. 

As always, Western Overseas is dedicated to keeping our customers informed, and will continue to provide updates as they unfold. Please reach out to your Western Overseas agent with any questions or concerns.