August 19, 2019

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The Nuts and Bolts of the Steel and Aluminum 232 Matters

On March 8, President Donald Trump announced that trade remedies would be imposed on steel and aluminum imports pursuant to Section 232 of the Trade Expansion Act of 1962.

Section 232 allows for trade remedies when the president, acting through and on the recommendation of the Department of Commerce, finds that imports threaten the national security of the United States. Upon such a finding, the president can “adjust the imports of an article and its derivatives” to remedy the situation.

Tariffs

Following the basic parameters recommended by the Commerce Department, the president ordered additional tariffs, which became effective on March 23, as follows:

  • For steel, an added tariff of 25% on imports from all countries, except those specifically excluded

  • For aluminum, an added tariff of 10% on imports from all countries, except those specifically excluded

  • Temporary country-based exclusions were granted for Canada, Mexico, the European Union, South Korea, Australia, Brazil, and Argentina

  • The temporary exclusions, which are aimed at allowing bilateral negotiations to occur, expire May 1, 2018

  • No quotas are included in the order, despite Commerce Department recommendations that tariff quotas be applied

Covered Products

The orders, along with the Annex and the guidance to US Customs and Border Protection, detail the Harmonized Tariff Schedule Codes to which the increased tariffs apply.

The tariffs apply to any covered products “entered, or withdrawn from warehouse for consumption, on or after 12:01 midnight March 23, 2018.” This means that the tariffs apply to products en route, or otherwise not “entered” (a term of art in US Customs law) by that date.

Exclusion Requests

On March 19, the Commerce Department published exclusion request procedures in the Federal Register. Exclusion relief is available for

  • any steel article 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.

Only US parties may make exclusion requests. There is no deadline for exclusion requests, and any request will be published with 30 days allowed for responsive comments.

Excluded Countries—Temporary Reprieve Pending Negotiations

While excluded countries receive a temporary reprieve, the progress of negotiations will dictate whether the exclusions continue, and absent agreements that will provide relief to the US industry, the increased tariffs could become effective as of May 1, 2018 for excluded countries.

Copyright © 2019 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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About this Author

Kenneth Nunnenkamp, Morgan Lewis, International trade attorney
Partner

Ken Nunnenkamp represents clients in international trade and national security matters before United States federal courts and government agencies, including the US departments of State, Commerce, Homeland Security, Defense, and Treasury. His practice involves internal investigations and disclosures, including voluntary disclosures and responding to government demands, as well as federal court defense against government actions. He also advises on compliance counseling and training, transactional due diligence–including both domestic and cross-border transactions–and...

202-739-5618
Giovanna M. Cinelli, Morgan Lewis, International Trade Attorney, National Security, Economic Sanctions
Partner

Giovanna M. Cinelli is co-lead of the International Trade, National Security and Economic Sanctions practice. As a practitioner for more than 25 years, she counsels clients in the defense and high-technology sectors on a broad range of issues affecting national security and export controls, including complex export compliance matters, audits, cross-border due diligence, and export enforcement, both classified and unclassified.

202-739-5619