U.S. Raises Steel and Aluminum Tariffs to Combat Transshipping Through Mexico

Trade Update • July 16, 2024

resident Biden has issued a proclamation aimed at preventing China and other countries from evading Section 232 tariffs on steel and aluminum by transshipping such goods through Mexico. This move is intended to address national security concerns and prevent the circumvention of existing tariffs.

Increased Tariffs on Specific Origins

The proclamation specifies an increase in tariffs for aluminum imports from Mexico that contain materials smelted or cast in China, Russia, Belarus, or Iran. This stringent measure aims to prevent tariff circumvention and protect domestic industries.

Steel & Derivatives

• If country of melt and pour is any country other than Mexico, the US or Canada then 25% Section 232 duty will apply. The new tariff specific to country of origin Mexico to report for steel is 9903.81.85 and steel derivatives is 9903.81.86.
• Steel of Mexico origin will continue to be exempt from 232 duty only if the country of melt and pour is Mexico, the US or Canada.
• Programming is being done to require the country of melt and pour be reported on the entry filing for all steel imports (similar as already being reported for aluminum)

Aluminum & Derivatives

• If country of primary smelt, secondary smelt or most recent cast is China, Belarus or Iran, 10% Section 232 duty will apply. New tariff specific to country of origin Mexico to report for aluminum is 9903.85.71 and aluminum derivatives is 9903.85.72
• If country of primary smelt, secondary smelt or most recent cast is Russia, 200% Section 232 duty will apply. Report tariff 9903.85.67 for aluminum articles or 9903.85.68 for aluminum derivatives
• APHIS Lacey Phase VII mandatory reporting effective 12/1/2024. Client communication has been drafted and will be shared with the teams to communicate to impacted clients with a list of products including data fields for the client to complete for products that require reporting or disclaims added. Clients will be asked to return the data prior to the implementation date to facilitate a smooth transition.

Country of Smelt Requirement

A key aspect of the proclamation is the enforcement of a “country of smelt and most recent cast” requirement for aluminum and steel imports from Mexico. Importers must provide a Certificate of Analysis for smelted aluminum or other required information to U.S. Customs and Border Protection (CBP). This measure ensures the traceability of the aluminum’s origin, which enhances the U.S. ability to monitor and control imports effectively.

Effective Date and Provisions

These changes are effective in effect for goods entered into the U.S. for consumption, or withdrawn from warehouse for consumption, starting at 12:01 a.m. EDT on July 10, 2024, and will remain in effect unless expressly reduced, modified, or terminated. Any imports of aluminum articles from Mexico admitted into a U.S. foreign trade zone under “privileged foreign status” before that time, and/or upon entry for consumption on or after this time will be subject to tariffs .

Ensure your supply chains are compliant. Questions whether or not your products are affected? We are always here to help, contact us.