Section 232 Tariffs on Aluminum and Steel

aluminum tariff increaseImporters in the trade of Steel and Aluminum are beginning to experience changes to their business practices after Section 232: Tariffs on Aluminum and Steel took effect. This resulted in a 25 percent duty on steel products and a 10 percent duty on aluminum products imported.

Under Section 232 of the Trade Expansion Act of 1962, the U.S Administration issued Proclamation 9704 and 9705 on Adjusting Imports and Steel and Aluminium into the country.

On March 23, 2018, goods that entered, or withdrawn from warehouse for consumption were affected by the duty requirements. More importantly, The basis for Section 232 is on the country of origin, not the country of export.

At the beginning stages of Section 232, certain countries were exempt from the raised duty rates. However, On May 31, 2018, the President issued Proclamations which ended temporary exceptions of duties for imports of steel and aluminum products from the European (EU), Canada, and Mexico.

Why are the rates increasing?

Section 232 deals with Safeguarding National Security. This implies that action may be taken if an article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.

Investigations and reports all point to the conclusion that the circumstances and quantities of steel and aluminum imports threaten to impair national security. This gives then gives the President full authority to enact and/or redact based on investigations. In this case, the action is an increase in tariffs and aluminum imports.

You may view a short version of the administration’s statement here.

How does this affect importers of Steel and Aluminum?

Section 232 Tariff Two specific imports are affected by this Presidential Proclamation; steel mill and aluminum articles. The new duty rates for these commodities are the following:

25% tariff on steel imports

10% tariff on aluminum

The U.S Administration did not immediately enforce this in all countries. In the initial stage, some countries will be exempt from this raised duty rate but will change as time progresses.

Steel Tariff Effectivity

From May 1, 2018 to May 31, 2018

May 2018: All countries of origin except Mexico, Argentina, Canada, Australia, Brazil, South Korea, and member countries of the European Union.

As of June 1, 2018: All countries of origin except  Australia, South Korea, Brazil, and Argentina

Aluminum Tariff Effectivity

May 2018: All countries of origin except Mexico, Argentina, Canada, Australia, Brazil, South Korea, and member countries of the European Union.

As of June 1, 2018: All countries of origin except Argentina, Australia, and Brazil.

Important notes:

  • The only country exempted from the tariffs and not subject to quotas is Australia.
  • South Korean Aluminum articles are also subject to additional import duties under Section 232.
  • For both steel and aluminum, imports of United States origin are not covered by the Section 232 measures.

For a full look at this legislation from Customs and Border Protection, read the full breakdown on Section 232 on the CBP website.

Are you concerned about how this affects your business? Call 303-365-1000 or email us anytime.