Trade Compliance

GHY discusses changes to international trade regulations and explores cutting-edge compliance strategies.

Steel/Aluminum Tariffs Expanded

Posted January 29, 2020


The Trump administration is expanding its “national security” steel and aluminum tariffs to include “derivative” products — certain manufactured articles where steel and aluminum make up two-thirds or more of the value of the good.
Reasoning


A proclamation issued by the White House late last week accused foreign companies of trying to find ways around the steep tariffs President Trump had placed on imported steel and aluminum beginning in March 2018.

The decision to expand the Section 232 tariffs was based on a recommendation from the Commerce Department, which found the existing tariff coverage was failing to achieve the administration’s desired targets for the steel and aluminum industries.

Instead, the tariffs have raised costs for U.S. manufacturers of products incorporating steel or aluminum making them less competitive, at the same time inviting a surge in imports of lower-cost “derivative” articles such as steel nails, tacks, drawing pins, corrugated nails, staples, or aluminum stranded wire, cables and plaited bands.

Chad Bown, a senior fellow at the Peterson Institute for International Economics, called this an example of “cascading protectionism” that he said was “entirely predictable.”

Scope of the New Tariffs


The new import tariffs are in addition to 10% import tariffs imposed on aluminum and 25% duty levied on steel from most countries under the Section 232 measures, effective March 23, 2018.

Derivative items covered by the proclamation include the following:

  • nails, tacks (other than thumb tacks), drawing pins, corrugated nails, staples (other than those of HTSUS heading 8305) and similar articles, of iron or steel, whether or not with heads of other material (excluding such articles with heads of copper) that are (a) suitable for use in powder-actuated hand tools, threaded (described in subheading 7317.00.30) or (b) of one piece construction, whether or not made of round wire (described in HTSUS 7317.00.5503, 7317.00.5505, 7317.00.5507, 7317.00.5560, 7317.00.5580 or 7317.00.6560 only and not in other statistical reporting numbers of subheadings 7317.00.55 and 7317.00.65
  • bumper stampings of steel or aluminum, the foregoing comprising parts and accessories of the motor vehicles of headings 8701 to 8705 (8708.10.30)
  • body stampings of steel or aluminum, for tractors suitable for agricultural use (8708.29.21)
  • stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and with steel core, not electrically insulated, fitted with fittings or made up into articles (7614.10.50)
  • stranded wire, cables, plaited bands and the like, including slings and similar articles, of aluminum and not with steel core, not electrically insulated, that (a) comprise electrical conductors and are not fitted with fittings or made up into articles (7614.90.20), (b) do not comprise electrical conductors and are not fitted with fittings or made up into articles (7614.90.40), or (c) are fitted with fittings or made up into articles (7614.90.50)

New Harmonized Tariff Schedule subheading numbers will apply for 

  • Derivative steel products — 9903.80.03
  • Derivative aluminum products — 9903.85.03

What’s Excluded:
 

The new tariffs will not apply to:

  • aluminum derivative articles from Argentina, Australia, Canada, and Mexico
  • steel derivative articles from Argentina, Australia, Brazil, Canada, Mexico, and South Korea.

In addition, manufacturers may request exclusions for any specific derivative article (steel or aluminum) determined not to be produced in the United States in a sufficient quantity or reasonable quality, or if importing such material is proven critical in preserving national security interests.

Need More Information?


Should you have any questions or concer ns about the possible impact this expansion of the Section 232 tariffs may have on your company’s bottom line, or want to discuss how best to obtain a temporary duty exemption, contact one of our trade experts today to get the answers you need.

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