United States: Is Your Business Prepared For New Tariffs On Aluminum And Steel Effective March 23?

A 10 percent ad valorem duty has been set for aluminum articles... and a 25 percent ad valorem duty has been set for steel articles.

On March 15, 2018, Presidential Proclamations 9704 (aluminum) and 9705 (steel) were published in the Federal Register Vol. 83. No. 51, at pages 11,619, etc., and pages 11,625, etc., respectively. As many are aware from continued coverage in the press, these proclamations are predicated upon national security concerns of the United States and the reports by the secretary of commerce under section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862). Mexico and Canada are excluded from the assessments for now in consideration of ongoing negotiations relating to the North American Free Trade Agreement (NAFTA).

A 10 percent ad valorem duty has been set for aluminum articles as defined in the proclamation relating to that category of product and a 25 percent ad valorem duty has been set for steel articles as defined in the second of these proclamations.

The effective date for the application of these duty rates is midnight Eastern time on March 23, 2018, with respect to goods entered into or withdrawn from warehouses for consumption on or after that date and time. These rates are in addition to any other duties, fees, exactions and charges applicable to such imported products. Such additional charges may include items such as harbor maintenance fees, merchandise processing fees and taxes, as appropriate.

Pursuant to Presidential Proclamation 9704, "aluminum articles" are defined in the Harmonized Tariff Schedule (HTS) of the United States as: unwrought aluminum (HTS 7601); aluminum bars, rods and profiles (HTS 7604); aluminum wire (HTS 7605);aluminum plate, sheet, strip and foil (flat rolled products) (HTS 7606 and 7607); aluminum tubes and pipes, tube and pipe fittings (HTS 7608 and 7609); and aluminum castings and forgings (HTS 7616.99.51.60 and 7616.99.51.70), including any revisions to these provisions. Please note that the four digit references above refer to HTS headings and the 10 digit references are specific breakouts under the applicable headings of the HTS.

For the purposes of Presidential Proclamation 9705, "steel articles" are defined at the HTS six 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 classifications.

The annex attached to each of the proclamations provides modifications to chapter 99 of the HTS which, as indicated herein, are effective with respect to goods entered into or withdrawn from warehouses for consumption on or after 12:01 a.m. Eastern time on March 23, 2018.

It is recommended that you consult with your legal counsel, customs house broker or cognizant customs officials, as appropriate, regarding the application of the above described duties to your products. In addition, to the extent that shipments are en route, consideration should be given to avoid in-transit shipments from the initial port of arrival, and to make consumption entry at the port of arrival rather than the port of ultimate destination.

In addition, it is essential that suppliers fully describe products on all documents submitted for customs clearance to avoid errors in the classification of affected products under the HTS. Similarly, to the extent that merchandise subject to the proclamations is currently in customs-bonded warehouses, you should consider entry for consumption of that merchandise prior to the effective date of the proclamations. Consult with your customs house broker to determine the form of consumption entry to be used so that entry is effective immediately. This also pertains to situations where merchandise is currently within a foreign trade zone and the intent is to remove the goods from the foreign trade zone for consumption into the customs territory of the United States.

The proclamations indicate that procedures will be put in place which provide the secretary of commerce a mechanism for the removal of products from the scope of the proclamations. It is expected that regulations will be proposed shortly regarding that process.

Finally, we call your attention to 19 U.S.C. 1514 and related customs regulations that provide for protest against decisions of the customs service.

For More Information

If you would like further information about this Alert, please contact Brian S. Goldstein, any  member of the International Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.

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