In an era marked by global unrest, regulatory complexities, and a shifting market landscape, companies must remain diligent in their trade compliance procedures and stay apprised of changes in the law.
TC Trade Alerts will serve as a central resource for identifying the policy changes, executive orders, and necessary information and context regarding government actions affecting international trade.
See below for more information on the last TC Trade Alerts. If you have any questions about how this affects your business, please don't hesitate to contact one of our attorneys.
| THOMPSON COBURN TRADE ALERT – IMPORTS | |
| HEADLINE | Implementation of Duties on Steel and Aluminum Products Pursuant to Proclamations 10895 and 10896 |
| DATE | 3 March 2025 |
| AGENCY | Department of Commerce, Bureau of Industry and Security (BIS) |
| EFFECTIVE DATES | 12 March 2025– All covered products
except for derivative steel articles classified outside of Chapters
72 or 73 of the Harmonized Tariff Schedule of the United States
(HTSUS) and derivative aluminum articles classified outside of
HTSUS Chapter 76 (with the exception of items classified in HTSUS
subheading 8708.10.30 and 8708.29.21). To Be Determined— Derivative steel or aluminum articles other than those described above. |
| BACKGROUND | On February 10, 2025, the President issued Proclamations adjusting imports of aluminum (Proclamation 10895 of February 10, 2025) (90 FR 9807) and steel (Proclamation 10896 of February 10, 2025) (90 FR 9817) into the United States. The Department of Commerce, in consultation with other agencies, was tasked with revising the HTSUS so that it conforms to the amendments and effective dates. |
| DETAILS | The Department of Commerce published Notices for public
inspection implementing the revised tariffs on aluminum and steel
articles. The Notices, which are scheduled to be published March 5,
adhere to the Executive Orders by indicating that the tariffs on
certain derivative aluminum or steel articles will be delayed until
a later notification by the Secretary of Commerce. Aluminum:The aluminum notice adds new tariff subheadings and subdivisions to U.S. note 19 to subchapter III of chapter 99 of the HTSUS. Such provisions will apply to goods entered after 12:01 am Eastern on March 12, 2025,exceptfor those in subdivision (k) that contain derivative iron or steel products classified outside of Chapter 76, which will be announced by the Department of Commerce at a later date. Steel:The steel notice adds new tariff subheadings and subdivisions to U.S. note 16 to subchapter III of chapter 99 of the HTSUS. Such provisions will apply to goods entered after 12:01 am Eastern on March 12, 2025,exceptfor those in subdivision (n) that contain derivative iron or steel products classified outside of Chapter 73, which will be announced by the Department of Commerce at a later date. Derivative steel articles that were in a Foreign Trade Zone (FTZ) in privileged foreign status prior to March 12, 2025, will also be subject to the tariffs. Other items of note are contained in the notices: " The quantity of the steel and aluminum content is to be reported in kg, and the duty imposed on certain derivative steel or aluminum articles as listed in the applicable subheading shall only apply to the declared value of the respective metal content. " Derivative articles will be eligible for applicable provisions of chapter 98, except "that duties under subheading 9802.00.60 shall be assessed based upon the full value of the imported article." While this is less than clear in the Notice, we believe this provision applies to the calculation of the ordinary duties, rather than the 232 tariffs. Such a conclusion would appear to fit with the statement that the tariffs do not apply to derivative steel or aluminum articles produced from steel that was melted and poured, or aluminum that was smelted or cast, in the United States. For the full Annex of each notice and the subheadings contained in each new subdivision, please click the links below. Like other recent trade actions, these tariffs should be monitored for unanticipated changes in policy. |
| BASIS | Section 232 of the Trade Expansion Act |
| HTS/PRODUCTS | Aluminum: " 9903.85.02 (headings 7601, 7604, 7605, 7607, 7607, 7608, 7609, 7616.99.51) " 9903.85.04 (derivative articles – wire, cable, bumper stampings) " 9903.85.07 (derivative articles – i.e. aluminum structures, kitchenware/household articles, other articles of aluminum) " 9903.85.08 (delayed effective date) (derivative articles – base metal mountings, air conditioners, instruments, etc.) " 9903.85.09 (derivative articles processed from aluminum articles that were smelted and cast in the United States) Steel: " 9903.81.87 (headings 7208 – 7215, 7225 – 7228, 7304 – 7306, 7206 7207, and more) " 9903.81.89 (derivative articles – nails, bumper stampings) " 9903.81.90 (derivative articles – i.e. tubes/pipes, stoves, kitchenware/household articles, other articles of steel) " 9903.81.91 (delayed effective date) (derivative articles – base metal mountings, furniture, signs, etc.) " 9903.81.92 (derivative articles processed from steel articles that were melted and poured in the United States) " 9903.81.93 (certain derivative articles admitted to a U.S. FTZ under "privileged foreign status" prior to March 12, 2025) |
| COUNTRY | All |
| CITE | Implementation of Duties on Steel Pursuant to
Proclamation 10896 Adjusting Imports of Steel into the United
States Implementation of Duties on Aluminum Pursuant to Proclamation 10895 Adjusting Imports of Aluminum into the United States |
Summary
President Trump issued three executive orders that "impose, consistent with law, ad valorem tariffs on articles that are products of" 25% on products of Mexico, 25% on products Canada (except energy products, which are at a lower 10% rate), and an additional 10% on products of China as set forth in each order, under IEEPA and other authorities. These duties are effective Tuesday, February 4, 2025. There is no drawback or duty-free de minimis relief available for these duties, and they will apply on top of other applicable programs.
Products Affected
The executive orders cover "all articles" that are the product of Mexico, Canada, and China, "as defined by the Federal Register notice." The Secretary of Homeland Security is tasked with determining and publishing "the modifications necessary to the Harmonized Tariff Schedule of the United States (HTSUS) in order to effectuate this order consistent with law." This notice has not been published yet. While it is anticipated that these E.O.s will cover all products from each nation, with the exception of Canadian energy products, there are significant questions to be resolved. For example, if a Chinese item was excluded from the Section 301 tariffs, will it be subject to the tariffs under the February 1 E.O.? Similarly, does the E.O. apply equally to goods that originate in Canada or Mexico under the United States-Mexico-Canada Agreement (USMCA) as it does to goods that are substantially transformed in Canada or Mexico, but do not qualify as originating under USMCA?
Canadian "energy or energy resources," which are subject to a 10% tariff instead of the 25% tariff applicable to other Canadian products, are defined by reference to section 8 of the president's order on January 20, 2025, Declaring a National Energy Emergency to include "crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and critical minerals, as defined by 30 U.S.C. 1606 (a)(3)."
Application in Relation to Other Duties
The rates of duty established in each order are defined to be in addition to any other duties, fees, exactions, or charges applicable to such imported articles.
No drawback program relief (19 CFR parts 190, 191) is available with respect to the duties imposed pursuant to these orders.
Duty-free de minimis treatment under 19 U.S.C. 1321 is not available for the articles affected by the tariff action.
For foreign trade zone products subject to each order, articles that are products of Canada, other than "domestic status" eligible products defined in 19 CFR 146.43, entered after the effective date must be admitted as "privileged foreign status" as defined in 19 CFR 146.41, and upon entry for consumption will be subject to the increased duties in effect at the time of admittance into the foreign trade zone.
There is no indication as to whether goods that are entered pursuant to one of the provisions of Chapter 98 of the HTSUS would be exempt from these duties.
Retaliation Clause
Each order contains a retaliation clause reserving the right to "increase or expand in scope" the tariffs imposed by each E.O., should the country retaliate by imposing additional tariffs on U.S. goods. Canada and Mexico have already announced tariff retaliations are planned, with Canada specifying 25% additional duties would be imposed on C$30 billion of U.S goods as of February 4, and an additional C$125 billion in goods in three weeks, according to Prime Minister Justin Trudeau's announcement February 1. He stated the list of products would include "American beer, wine and bourbon, fruits and fruit juices, including orange juice, along with vegetables, perfume, clothing and shoes ... major consumer products like household appliances, furniture and sports equipment, and materials like lumber and plastics, along with much, much more" as well as some "non-tariff measures" related to critical minerals, energy procurement, and other unspecified partnerships. See Transcript of Trudeau's response to U.S. tariffs on Canada, Global News, Posted February 1, 2025, 10:21 pm, available at https://globalnews.ca/news/10993376/trudeau-trump-tariffs-us-canaaada/.
Products Excluded and/or Exclusion Process
No product exclusions or exclusion process were announced.
Removal of Duties
The Secretary of Homeland Security is charged with consulting with several other cabinet secretaries and the attorney general regarding the emergency situation and is required to "inform the President of any circumstances that, in the opinion of the Secretary of Homeland Security," indicate the government of the tariffed country has taken "adequate steps" to alleviate the emergency that gave rise to the order. If the president determines sufficient action to stem the crisis has occurred, the tariffs will be removed. What constitutes "adequate steps" to justify removal is not defined.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
