Steel and Aluminum Tariffs: How to Cope with the Impact and Temporary Exemptions

Posted on April 3, 2018

By Adrienne Braumiller, Partner Founder of Braumiller Law Group, and Megan Mohler, BLG Law Clerk

The infamous proclamations are signed, published, and ready for rollout! Presidential Proclamations 9704 and 9705 that impose global safeguard tariffs on steel and aluminum imports officially took effect on March 23, 2018. The tariffs that impose a 25 percent duty on steel imports and 10 percent duty on aluminum imports, serve as a separate tax on top of any existing antidumping and countervailing duties as well as regular duties.

Exporters of the affected products around the world have reacted in different ways, but the main questions they should be asking are, “Are their exclusions?” and “How can I qualify for them?”

The short answer to both questions is “yes”, and “it depends.”

Built into the Proclamations are exclusions for steel and aluminum imports from Canada and Mexico, as NAFTA renegotiations are ongoing , but the proclamations are open-ended in other ways.

In an interim final rule published March 19, 2018, the Bureau of Industry and Security (BIS) issued requirements for submissions regarding exclusion requests, and the filing of objections to exclusions requests, to the steel and aluminum tariffs. They provide that if the steel or aluminum articles “are determined not to be produced in the United States in a sufficient and reasonably available amount, or of a satisfactory quality or based upon specific national security considerations,” then the articles might be subject to exclusion.

“Only individuals or organizations using steel [or aluminum] articles identified” in the proclamations “in business activities (e.g., construction, manufacturing, or supplying steel to users) in the United States may submit exclusion requests with respect to that Proclamation.”

“Any individual or organization in the United States may file objections to steel [or aluminum] exclusion requests, but the Commerce Department will only consider information directly related to the submitted exclusion request that is the subject of the objection.”

Product-specific exclusions will be handled by Commerce, but country-specific exclusions will be handled by the USTR if “a satisfactory alternative means to address the threat to national security can be negotiated with them.”

It is important to note: any exclusions are provisional, meaning they can be revoked at any time if a dispute arises between the U.S. and the party with the exclusion. Also, it is possible that Commerce could proactively amend exemptions to include certain qualified imports under Privileged Foreign status or all Foreign-Trade Zone admissions, but as of now the exemption process remains either country-specific or product-specific.

A running list of countries that have already negotiated an exemption, or are in the process, include: Canada, Mexico, the E.U. (members), South Korea, Brazil, Argentina, and Australia.

But Wait! There’s More!

On March 28, 2018, President Trump signed twin proclamations regarding the new steel and aluminum tariffs and so-called exempted countries. The proclamations establish an interim period from March 23-April 30, 2018, during which the named countries above are temporarily exempted from the new tariffs while negotiations with those countries are ongoing. Negotiations about what, you may ask? Well, the answer is discussions on exactly how to reduce excess steel and aluminum production and capacity to neutralize or reduce the threat to United States national security.

Essentially, the U.S. is giving the currently exempted countries a deadline to establish a satisfactory resolution in ongoing discussions before May 1, 2018. Come May 1, all exemptions will be lifted from all countries of origin (as opposed to country of export), seemingly including Canada and Mexico.

The Reach of the New Tariffs

The new headings created in the HTSUS are 9903.80.01 and 9903.85.01 for steel and aluminum, respectively.

A complete list of HTS headings affected are as follows:

Steel Headings:

(i) flat-rolled products provided for in headings 7208, 7209, 7210, 7211, 7212, 7225 or 7226;

(ii) bars and rods provided for in headings 7213, 7214, 7215, 7227 or 7228, angles, shapes and sections of 7216 (except subheadings 7216.61.00, 7216.69.00 or 7216.91.00); wire provided for in headings 7217 or 7229; sheet piling provided for in subheading 7301.10.00; rails provided for in subheading 7302.10; fish-plates and sole plates provided for in subheading 7302.40.00; and other products of iron or steel provided for in subheading 7302.90.00;

(iii) tubes, pipes, and hollow profiles provided for in heading 7304, or 7306; tubes and pipes provided for in heading 7305;

(iv) ingots, other primary forms and semi-finished products provided for in heading 7206, 7207, or 7224; and

(v) products of stainless steel provided for in heading 7218, 7219, 7220, 7221, 7222, or 7223.

Forms for exclusion requests and objections to exclusion requests can be found on regulations.gov or here.

Aluminum Headings:

(i) unwrought aluminum provided for in heading 7601;

(ii) bars, rods, and profiles provided for in heading 7604; wire provided for in heading 7605;

(iii) plates, sheets and strip provided for in 7606; foil provided for in heading 7607;

(iv) tubes, pipes and tube or pipe fittings provided for in heading 7608 and 7609;

(v) castings and forgings of aluminum provided for in subheading 7616.99.51.

Forms for exclusion requests and objections to exclusion requests can be found on regulations.gov or here.