On April 30, 2018, the U.S. President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States to update the status of country exemptions for the steel 25% and aluminum 10% tariffs.
Executive Summary
- Canada, Mexico, and European Union* member countries’ steel and aluminum exemptions are extended until 12:01 a.m. EDT on June 1, 2018. Further exemptions are pending ongoing discussions with those governments.
- Australia, Argentina, and Brazil remain exempt from the steel and aluminum tariffs until details can be finalized and implemented by proclamation on a satisfactory alternative means to address the threatened impairment to the national security – so there is no expiration date set. If the satisfactory alternative means are not finalized shortly, the president will consider re-imposing the tariff.
- South Korea is permanently exempted from steel, but is now subject to 53 different absolute quota categories based on weight for shipments since January 1, 2018. Some categories are already filled for 2018. South Korea is no longer exempt from the aluminum duties.
- While the Section 232 duties apply to non-exempt countries, trade preference may be claimed for all preference programs on the underlying tariff with the exception of GSP and AGOA.
- GSP may be claimed for eligible goods from Brazil and Argentina, as they are exempt from Section 232 duties.
- Drawback may not be claimed on Section 232 duties.
- Section 232 is based on country of origin (not country of export). It is important to be prepared to support the country of origin declared at entry.
* European Union Member Countries: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom
The following are the more specific details:
Steel
- For the period of May 1, 2018 through May 31, 2018, the 25% duty applies to all countries of origin except Canada, Mexico, Australia, Argentina, South Korea, Brazil and member countries of the European Union.
- As of 12:01 a.m. EDT on June 1, 2018, the 25% duty will apply to all countries of origin except Argentina, Australia, Brazil, and South Korea, unless the exemptions are further extended.
- An absolute quota now applies to shipments of steel from South Korea.
− There are 53 quota categories established with corresponding Chapter 99 numbers (subheadings 9903.80.05 through 9903.80.58) and specific limits by weight for each one.
− Aggregate limits shall apply for the period starting with calendar year 2018 and for subsequent years, unless modified or terminated.
− Each quarter is limited to 30% of the aggregate quota quantity by category for the year.
− If the quarterly quota category quantity is filled, then you must wait for the next quarterly quota period.
− Once the annual quota category limit is reached, no more steel under that quota category may be imported for consumption the rest of the year. Some categories are already filled.
Aluminum
- For the period of May 1, 2018 through May 31, 2018, the 10% duty applies to all countries of origin except Canada, Mexico, Argentina, Australia, Brazil and member countries of the European Union.
- As of June 1, 2018, the 10% duty will apply to all countries of origin except Argentina, Australia, and Brazil, unless the exemptions are further extended.
- South Korea is no longer exempt from the aluminum 10% duty. Importers may receive a quota hold message for imports of such articles; however, a quota is not in effect for imports of aluminum from South Korea.
U.S. Origin
- For both steel and aluminum, imports of United States origin are not covered by the Section 232 measures.
Chapter 98
- Imports subject to Section 232 duties imported under subheading 9802.00.60 shall be assessed Section 232 duties based upon the full value of the imported article.
Trade Programs
GSP and AGOA-eligible goods that are subject to Section 232 duties may not receive GSP or AGOA duty preference in accordance with 19 USC 2463(b)(2). Note: GSP may be claimed for eligible goods from Brazil and Argentina, as they are exempt from Section 232 duties.
Trade preference may be claimed for all preference programs with the exception of GSP and AGOA, as stated above. Importers making a trade preference claim under a program other than GSP or AGOA may continue to receive the preferential duty rate and any MPF exemption that may apply in accordance with 19 CFR 24.23(c). Section 232 duties must be paid on imports subject to Section 232 even if trade preferences apply.
Foreign Trade Zones
- Any steel or aluminum article, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, subject to the Section 232 duties, that is admitted into U.S. foreign trade zones on or after 12:01 a.m. eastern daylight time on March 23, 2018, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading.
- Any steel or aluminum article, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, subject to the 232 duties, that was admitted into U.S. foreign trade zones under “privileged foreign status” as defined in 19 CFR 146.41, prior to 12:01 a.m. eastern daylight time on March 23, 2018, will likewise be subject upon entry for consumption to any ad valorem rates of duty related to the classification under applicable HTSUS subheadings imposed by the Proclamations.
- Aluminum or steel articles shall not be subject upon entry for consumption to Section 232 duties, merely by reason of manufacture in a U.S. foreign trade zone. However, articles admitted to a U.S. foreign trade zone in “privileged foreign status,” shall retain that status consistent with 19 CFR 146.41(e).
Anti-Dumping and Countervailing Duty
- The merchandise covered by the additional duties and quota may also be subject to anti-dumping and countervailing duties.
Duty Drawback
- No drawback shall be available with respect to the Section 232 duties imposed on any aluminum or steel article.
Information Sources
Presidential Proclamation Adjusting Imports of Aluminum into the United States
Presidential Proclamation Adjusting Imports of Steel into the United States
CSMS #18-000315 – Additional Duty on Imports of Steel and Aluminum Articles under Section 232
CSMS# 18-000316 – Quota Announcement South Korea Steel Mill Articles
CSMS #18-000317 – UPDATE: Additional Duty on Imports of Steel and Aluminum Articles under Section 232
QB 18-118 – Quota Bulletin Steel Mill Articles