President Trump imposed these so-called “safe-guard” tariffs pursuant to the seldom-used Section 232 of the Trade Expansion Act of 1962, which allows the Executive Branch to conduct investigations to determine the effects on U.S. national security of certain imports and adjust such imports through duties. The last time Section 232 was used to impose tariffs was in 1975 when President Gerald Ford taxed foreign oil. Unlike antidumping or countervailing duties, which are meant to remedy damage to U.S. industries caused by unfair competition and target specific companies or countries, “safeguard” tariffs focus on national security and typically apply to all countries.
President Trump’s action is based upon two (2) January 2018, Department of Commerce reports, which concluded that the current quantities and circumstances of steel and aluminum imports “threaten to impair the national security,” as defined by Section 232. In such reports, the Commerce Department recommended that the President take action to protect the long-term viability of the domestic steel and aluminum industries.
In concurring with the investigation findings, President Trump declared that ad valorem tariffs would be imposed upon imports classified under the below-listed Harmonized Tariff Schedule of the United States import codes. Steel and aluminum products classified under these categories now face either 25% or 10% duties, in addition to all other duties, fees, exactions, and charges already applicable to such imports:
- Steel – 25%
- HTS 7206.10 through 7216.50
- HTS 7216.99 through 7301.10
- HTS 7302.10
- HTS 7302.40 through 7302.90
- HTS 7304.10 through 7306.90
- Aluminum – 10%
- HTS 7601
- HTS 7604 through 7609
- HTS 7616.99.5160 and 7616.99.5170
Exemptions and Exclusions
For the time being, the above tariffs apply to imports of the subject goods from all countries except Canada and Mexico. However, the President has retained the authority to raise or lower such tariffs on a country-by-country basis, at his discretion. Additionally, regarding the scope of products subject to the tariffs, the Department of Commerce has the authority to exclude certain steel and aluminum products, if it determines that such products are not produced domestically (i) in sufficient and reasonably available amounts; or (ii) of satisfactory quality. Procedures by which to request such exclusions will be issued by March 18, 2018.
Given the foregoing, the scope of steel and aluminum products subject to these new safeguard tariffs and the list of countries subject to such tariffs may change from time to time. Accordingly, we will continue to closely monitor the situation and provide timely updates. In the meantime, we strongly recommend that companies carefully vet their supply chain to assess the potential economic impact of these tariffs on their operations.
For more information regarding the new steel and aluminums tariffs or for any questions on trade compliance matters, please contact Jan de Beer, Katherine Berkley or Chanhee Han on Frost Brown Todd’s International Trade Compliance Service Team.
(This article was originally published and distributed as an FBT Legal Update.)