Update on Section 232 Duties on Steel and Aluminum – President Grants Temporary Reprieve to U.S. Allies & Clarifies Use of Exemptions


May 4, 2018

In a series of recent CSMS messages, CBP outlined revisions to the President’s Orders on the assessment of Section 232 duties on imports of steel and aluminum articles (See CSMS# 18-000316 and 18-000317). The duty requirements under these proclamations were effective with respect to goods entered, or withdrawn from warehouse for consumption, on or after March 23, 2018. (See our previous newsletters dated March 22, 2018 and April 11, 2018 for further information on these proclamations.)

Most significantly, the president has extended the deadline for steel and aluminum tariff exemptions for U.S. allies through May 31, 2018.

It is important to note that the Section 232 measures are based on country of origin, not the country of export.

Effective Dates:  Steel

Permanent Exclusion List: Targeted steel goods with the following countries of origin are permanently exempt from the duties: Argentina, Australia, Brazil and South Korea.

Importers should be prepared to provide proof of origin, including signed Mill Certificates from the producing mill.

Temporary Exclusion List: For the month of May, the following countries are subject to a temporary exemption from Section 232 steel duties:

Canada, Mexico, and member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).

Unless additional extensions are granted, as of June 1, 2018 Section 232 duties will be in effect for all.

Korean Quota: Effective May 1, 2018, iron or steel products imported into the U.S. with a country of origin of South Korea are subject to absolute quota. It should be noted that the quota for the following items has been filled:

  • 9903.80.26 – Tubes or pipes for piling and other products, provided for in subheading 7305.39.10 or 7305.39.50
  • 9903.80.32 – Cold-rolled strip of stainless steel, provided for in subheading 7220.20.10, 7220.20.60, 7220.20.70, 7220.20.80, 7220.20.90 or 7220.90.00
  • 9903.80.43 – Bars and rods, hot-rolled, in irregularly wound coils, of stainless steel, provided for in heading 7221.00.00 (except for statistical reporting numbers 7221.00.0005, 7221.00.0045 and 7221.00.0075
  • 9903.80.48 – Bars, hot-rolled, not of stainless steel, provided for in subheading 7213.20.00, 7213.99.00, etc.
  • 9903.80.50 – Angles, shapes and sections of a type known as “light-shaped bars” and other products, provided for in subheading 7216.10.00, 7216.21.00, 7216.22.00 or 7228.70.30
  • 9903.80.56 – Products of tool steel and other products, provided for in subheading 7224.10.00

Further information on the status of quota for Korean steel can be found in quota bulletin (QB) 18-118 (https://www.cbp.gov/trade/quota/bulletins/qb-18-118-steel-mill-articles) or on the quota page at CBP’s website.  Questions related to absolute quota filing requirements can be email to HQQQOTA@cpb.dhs.gov.

Effective Dates: Aluminum

Permanent Exclusion List: Aluminum goods from the following countries of origin are permanently exempt from the duties – Argentina, Australia and Brazil.

Temporary Exclusion List: For the month of May, the following countries are subject to a temporary exemption from Section 232 aluminum duties:

Canada, Mexico, South Korea, and member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom).

Aluminum articles from South Korea are subject to the Section 232 duties as of May 1, 2018. A quota is not in effect for imports of aluminum from South Korea but importers may receive a quota hold message for imports of these goods.

Imports of both steel and aluminum articles of U.S. origin are not covered by the Section 232 measures.

Limitations on Use of Preference Programs

Generalized System of Preferences (GSP) and African Growth and Opportunity Act (AGOA)

GSP and AGOA-eligible goods that are subject to Section 232 duties may not receive GSP or AGOA duty preference in accordance with 19 USC 25633(b)(2). In addition to the Section 232 duties on these goods, importers must pay the NTR duty rates and not submit the GSP Special Program Indicator (SPI) “A” or the AGOA SPI “D”.

The only exception to the above is for products with countries of origin of Brazil and Argentina which are exempt from Section 232 duties. Importers may claim GSP for goods from these 2 countries.

Other Trade Preference Programs and Free Trade Agreements

Trade preferences may be claimed for all other preference programs (except for GSP and AGOA, as discussed above). Importers making a trade preference claim under a program other than GSP or AGOA may continue to receive the preferential duty rate and any MPF exemptions that may apply in accordance with 19 CFR 24.23(c). Section 232 duties must be paid on aluminum and steel imports subject to Section 232 even if trade preferences apply.

Chapter 98 Imports

Merchandise subject to Section 232 duties imported under subheading 9802.00.60 shall be assessed Section 232 duties based upon the full value of the imported article.

Foreign Trade Zones: “Privileged Foreign Status”

Any steel or aluminum article, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, subject to the Section 232 duties admitted into U.S. foreign -trade zones on or after March 23, 2018, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under the applicable HTSUS subheading at the time of admission.

Any steel or aluminum article, except those eligible for admission under “domestic status” as defined in 19 CFR 146.43, subject to the 232 duties that was admitted to U.S. foreign trade zones under “privileged foreign status” as defined in 19 CFR 146.41, prior to March 23, 2018 will be subject upon entry for consumption to any ad valorem rates of duty related to the classification under applicable HTSUS subheadings imposed by the Proclamations.  

Aluminum or steel articles shall not be subject upon entry for consumption to Section 232 duties merely by reason of manufacture in a U.S. foreign trade zone. However, articles admitted to a U.S. foreign trade zone in “privileged foreign status” shall retain that status consistent with 19 CFR 146.41(e).

Antidumping and Countervailing Duties

The merchandise covered by Section 232 duties and quota may also be subject to antidumping and countervailing duties.

Drawback

No drawback shall be available with respect to the Section 232 duties imposed on steel and aluminum articles.

For more information, please refer to the Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States, Federal Register, 83 FR 11619 and 83 FR 11625, March 15, 2018; the March 22, 2018 Presidential Proclamations on Adjusting Imports of Steel and Aluminum into the United States. 83 FR 13355 and 83 FR 13361, March 28, 2018; and the April 30, 2018 Proclamations on Adjusting Imports of Steel and Aluminum into the United States.

For additional CBP information and guidance, go to:  https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-aluminum-and-steel#  and Frequently Asked Questions at https://www.cbp.gov/trade/programs-administration/entry-summary/232-tariffs-aluminum-and-steel.

Questions related to Section 232 entry filing requirements should be emailed to traderemedyunit@cbp.dhs.gov. Questions from the importing community concerning ACE rejections should be referred to your Client Representative.

For further information about these and other customs matters, please contact George R. Tuttle, III, at geo@tuttlelaw.com or 415-986-8780.

George R. Tuttle, III is an attorney with the Law Offices of George R. Tuttle in the San Francisco Bay Area.

The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

Copyright © 2018 by Tuttle Law Offices.  

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Information has been obtained from sources believed to be reliable.  However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.

 

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