This Monday President Trump announced increased Section 232 aluminum tariffs from 10 percent to 25 percent ad valorem and revocation of existing country- and product-specific exclusions. The new tariffs become effective on March 12, 2025 and impact aluminum imports and certain derivative aluminum articles.
The original "aluminum Section 232 duties" of 10 percent ad valorem were put in place by President Trump in 2018. From nearly the outset, aluminum from certain countries was allowed to enter the United States unencumbered by duties — either due to country-specific exemptions negotiated by the United States, or in response to a product-specific exclusion process that was implemented in 2018. All such country- and product-specific exemptions are to be summarily rescinded following President Trump's February 10 Proclamation.
However, some of the modifications included in the Proclamation will not take effect for weeks or months — a window that could theoretically be used by the Trump Administration to negotiate further changes to the 232 tariff landscape. Of note also is the proposal to include more imports of aluminum derivatives through a process to be administered by the Commerce Department.
Clock Ticking on Country-Specific Exclusions
Pursuant to the Proclamation, the country-specific exemptions covering Argentina, Australia, Canada, Mexico, the European Union, and the United Kingdom will terminate as of 12:01am March 12, 2025. This effectively ends any free trade in aluminum, quota agreements, or tariff-rate quotas, as applicable.
As of that date, all imports of aluminum articles and derivative aluminum articles from Argentina, Australia, Canada, EU countries, Mexico, and the United Kingdom, in addition to all countries except Russia, will be subject to the additional 25% ad valorem tariffs proclaimed in Proclamation 9704 (with respect to aluminum articles) and Proclamation 9980 (with respect to derivative aluminum articles). Russia will continue to be subject to 200% ad valorem tariffs.
The 30-day implementation period provides a window for foreign governments to further negotiate with the Trump Administration to maintain the exemption pursuant to alternative agreements, including (a) taking action adverse to Chinese shipments, (b) agreeing to a "melt and poured" limitation, or (c) proposing alternative quota-based arrangements calibrated to U.S.-demand fluctuations, although none of these concessions guarantees that a country will be able to maintain its exemption.
Product-Specific Exclusions Eliminated
President Trump's Proclamation also withdrew authority from the Secretary of Commerce to provide for product-specific exclusions, effective immediately.
As of 11:59 p.m. February 10, 2025, the Secretary of Commerce is (1) no longer permitted to consider new product exclusion requests, (2) no longer permitted to renew any product exclusion requests already in effect, and (3) to take all necessary steps to rescind the product exclusion process itself.
The Proclamation provides that previously-granted product exclusions shall remain effective until (a) their expiration date or (b) the excluded product volume is imported.
Furthermore, the existing "general approved exclusions," which once granted remained in effect in perpetuity, are rescinded effective March 12, 2025.
Planned Expansion of Aluminum-Derivative Coverage Directly and Through Domestic Industry Petitions
The Proclamation instructs the Secretary of Commerce to publish in the Federal Register an "Annex" with specifics on the derivative aluminum articles now subject to the 25% ad valorem duties. Given the broad range of derivative aluminum products likely to be impacted, producers, importers, purchasers, and others will be eager to see these forthcoming details.
The Proclamation also provides for additional tariffs to be imposed on imports of derivative aluminum articles via a producer-initiated request process. The Proclamation gives the Department of Commerce 90 days — until May 11, 2025 — to create a process to consider whether to apply the aluminum Section 232 duties to additional derivative aluminum articles. In filing a request, a producer (or an industry association representing one or more such producers) must establish that imports of a derivative aluminum article have increased in a manner that threatens to impair the national security (or otherwise undermine the objectives set forth in the Commerce Secretary's original 2018 report or in the various Presidential Proclamations issued since). Commerce will then have 60 days to rule on the request to cover an aluminum derivative article under the Section 232 duties. More details will be forthcoming in a Federal Register notice, but the Proclamation itself does not obligate Commerce to allow for significant engagement from the trade.
CBP Instructed to Fortify Enforcement
The Proclamation also directs US Customs and Border Protection (CBP) to enhance its enforcement of these expanded Section 232 tariff measures.
CBP is instructed to prioritize reviews of the classification of imported aluminum articles and derivative aluminum articles and, in the event that it discovers misclassification resulting in non-payment of the applicable ad valorem duties, to assess monetary penalties in the maximum amount permitted by law, and to not consider any evidence of mitigating factors in its determination.
The Proclamation instructs that importers will need to provide CBP with "any information necessary" to identify the aluminum content used in the manufacture of aluminum derivative articles imported, and instructs CBP to establish relevant "information requirements" as soon as possible.
Similar to the steel Section 232 duties and prior presidential actions imposing tariffs, this Proclamation provides that no drawback is available with respect to the duties imposed. Furthermore, any merchandise entered into a US foreign trade zone on or after 12:01 a.m. eastern daylight time on March 12, 2025, must be admitted as "privileged foreign status" as defined in 19 CFR 146.41, which locks in place the duty amount regardless of how the aluminum article is transformed within the zone.
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