While the possibility of reciprocal tariffs being placed on imported goods has been put off until at least April, on Friday, proclamations were released for a major expansion of goods which will be subject to the 25% Section 232 tariffs. Included in the recent Presidential Proclamation revoking the country-specific exemptions and quotas to the 232 tariffs was language allowing for the expansion to the list of derivatives for steel and aluminum products. The lists of additional items to be included as derivatives have been compiled pending publication. This is a major expansion which, unless modified or suspended, will adversely affect many imported products.
Chapter 73 has an expansive list of products now considered to be derivatives of steel, and it includes the subheading for other articles of steel, a very common classification. Steel fasteners such as nuts, bolts, screws, and washers found in Chapter 73 are also added. Some parts for equipment classified under 8431 and 8432 are on the expanded list, as is metal furniture entered under 9403.20. 00. Steel prefabricated buildings entered under subheadings 9602.20.00 and 9602.90.01 and other less obvious products are now considered derivative products.
Likewise, the expansion of aluminum derivatives is going to be problematic as it also includes the commonly used HTS code for other articles of aluminum, 7616.99.5190. Aluminum mountings and fittings in subheadings under 8302, as well as furniture under subheading 9403.20.00 and certain furniture parts under 9403.99, are included. Some of the expanded HTS codes fall under machinery and parts subheadings in chapters 84 and 85. The high number of HTS codes outside of chapter 76 which are on the aluminum derivatives list is certain to create pain points.
For goods classified outside of Chapters 73 and 76, the item must contain steel or aluminum to be eligible for the additional tariffs. For derivatives classified in Chapter 73 or 76, the additional tariff will apply to the full value of the product, but for derivatives classified outside of Chapter 73 or 76, the tariff will only apply to the value of the steel or aluminum content. What is missing from the notices are specifics on the method for calculating and reporting the value of the steel or aluminum content. According to the proclamation, the changes for the derivatives will be effective once the Secretary of Commerce has determined that adequate systems are in place to allow for the efficient collection of the tariffs.
Both of the expanded derivatives lists are scheduled to be published in the Federal Register on February 18 and can be viewed here (steel) and here (aluminum). The lists of currently active derivative products remain in place.
This action comes on top of the announced revocations of the country-specific exemptions for Argentina, Australia, Brazil, Canada, EU countries, Japan, Mexico, South Korea, Ukraine, and the UK. The revocations are scheduled to take place on March 12, 2025, unless suspended. The existing product and importer-specific exclusions granted to importers remain in place, but those exclusions, according to the proclamation, will not be renewed, nor is there a mechanism for importers to apply for new exclusions. Derivative goods made from steel produced in the US are exempt from the additional tariffs, but the importer must be prepared to show proof, likely in the form of a US mill certificate. The current additional tariff for steel is 25% and remains the same while the rate for aluminum will be increased from 10 % to 25%.
Importers are advised to review their products for possible tariff increases and to pay attention to any future announcements from the White House. We will be sending out further alerts as circumstances dictate.
Best Regards,
Sam McClure, LCB
Director of Compliance & Customs Services