On February 11, 2025, President Trump issued two Proclamations imposing enhanced import duties on steel and aluminum products under Section 232 of the Trade Expansion Act of 1962. The orders eliminate certain exemptions from the duties, expand their scope to cover additional products, and raise the duties on covered aluminum goods from 10% to 25%.

On February 18, 2025, two Federal Register Notices were published that included lists of “derivative” products subject to the 25% tariffs on steel and aluminum under Section 232. The Federal Register Notices, which include the specific HTS subheadings for the derivative products in Annex 1 are available here (steel) and here (aluminum).

As of March 12, 2025, additional Section 232 tariffs of 25% will apply to covered aluminum and steel products from all countries. This means that countries that previously had certain exemptions from the 232 tariffs such as Argentina, Australia, Brazil, Canada, the EU, Japan, Mexico, South Korea, and the United Kingdom will also be subject to the 25% tariffs. Imports of derivative aluminum articles that contain “any amount of primary aluminum used in the manufacture of the derivative aluminum articles is smelted in Russia, or the derivative aluminum articles are cast in Russia,” are subject to a duty of 200%.

In addition, the additional 25% tariffs will apply to the lists of aluminum and steel derivatives identified in the annexes to the Federal Register Notices once the U.S. Department of Commerce certifies that “adequate systems are in place to fully, efficiently, and expediently process and collect tariff revenue for covered articles.”

Foreign trade zones and Drawback

Derivative steel and aluminum articles admitted into a U.S. Foreign Trade Zone (FTZ) after March 12, 2025, must be admitted as “privileged foreign status” (unless eligible for “domestic status”) and will be subject to the additional duties upon entry for consumption into the United States. Importers cannot reclaim these duties under the duty drawback program.

Exclusions

As of February 19, 2025, no new exclusions or exemptions have been announced. If an importer has an existing product-specific, importer-specific product exclusion for steel or aluminum products, the exclusion will remain effective until the expiration date or until their excluded volume is exhausted, whichever occurs first. The current general approved exclusions will lapse on March 12, 2025, and will not be renewed.

The proclamation establishes an exclusion for derivative steel products processed in another country if they originate from steel articles that were melted and poured in the U.S. and for derivative aluminum products processed in another country if they originate from aluminum articles that were smelted and cast in the U.S.

Authority & Rationale

Section 232 of the Trade Expansion Act of 1962 allows the president to impose import restrictions based on an investigation and affirmative determination by the U.S. Department of Commerce that certain imports threaten to impair U.S. national security. Commerce conducted investigations and released a report in February 2018 finding that excessive steel and aluminum imports had weakened the domestic industries, reducing their ability to meet national defense and critical infrastructure needs.

In response to this report, the first Trump Administration imposed a 10% tariff on aluminum and 25% tariff on steel imports in March 2018. The proclamation states that despite this action, aluminum imports into the United States have continued at unacceptable levels. As a result, domestic producers have been forced to idle additional production and shut down facilities. The proclamation states that this action is necessary to allow U.S. aluminum producers to restart production and to incentivize new capacity.

Next Steps

The proclamation directs several departments and agencies to take action to implement the policy:

  • Within 90 days, Commerce must establish a process allowing U.S. steel and aluminum producers to request the inclusion of additional derivative products under these tariffs.
  • Within 10 days, the United States International Trade Commission shall revise the HTSUS to reflect the new policy.
  • The Secretary shall take all actions, including publication in the Federal Register, necessary to terminate the product exclusion process.
  • CBP is directed to publish regulations or guidance implementing the requirements as soon as practicable.
  • CBP is directed to promptly notify Commerce if it finds evidence of any efforts to evade payment of the additional duties.
  • The Secretary may issue regulations and guidance to address operational necessity.

In addition, going forward, importers must provide steel and aluminum content information for derivative steel articles to U.S. Customs. CBP will prioritize the review of product classification for imported steel and aluminum articles. If misclassification is detected, maximum penalties will be imposed, with no consideration for mitigating factors.

Diaz Trade Law will continue to monitor for developments and will provide additional information as it becomes available.

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