It is anticipated that the Commerce Department will announce that exclusion requests will be accepted for derivative aluminum and steel products.
In response to reports from the secretary of commerce to the president, new Section 232 duties will be imposed on a wide range of certain aluminum and steel derivative products from many countries, effective February 8, 2020
Background
On March 8, 2018, Presidential Proclamations 9704 and 9705 were issued, adjusting aluminum and steel imports, respectively. President Trump, based upon Commerce Department reports that certain aluminum and steel articles were being imported into the United States in such quantities and under such circumstances as to threaten to impair national security, determined to impose additional duties pursuant to Section 232 of the Trade Expansion Act of 1962, as amended (Section 232 duties), on certain specified aluminum and steel articles from many countries. Beginning on March 23, 2018, Section 232 duties of 10 percent were imposed on the covered aluminum articles and Section 232 duties of 25 percent were imposed on the covered steel articles. See 83 Fed. Reg. 11619 (March 15, 2018) and 83 Fed. Reg. 11625 (March 15, 2018).
By subsequent presidential proclamations, further adjustments were made to certain imports of the covered aluminum articles and the covered steel articles from certain countries by the imposition of quantitative quotas. In addition, the secretary of commerce was directed by the president to monitor imports of aluminum and steel products and to report “any circumstances that in the Secretary’s opinion might indicate the need for further action… .”
Recent Developments
After reports from the secretary of commerce that included concerns regarding the capacity utilization of the domestic aluminum and steel industries and the level of imports of aluminum, President Trump determined that further adjustments to imports were required. Although imports of certain aluminum articles and steel articles have declined since the imposition of the Section 232 duties and quotas, certain derivatives of aluminum and steel articles have increased significantly since then. This reported increase in imports of certain derivative steel and aluminum products has adversely impacted U.S. producers and “undermines the purpose of the proclamations adjusting imports of aluminum and steel articles to remove the threatened impairment of the national security.”
To remedy this development, President Trump has issued Presidential Proclamation 9980 of January 24, 2020. Pursuant to Proclamation 9980, Section 232 duties will be imposed on certain derivative articles from certain countries that are identified in Annex I (aluminum) and Annex II (steel), effective February 8, 2020. Derivative aluminum products will be subject to Section 232 duties of 10 percent, and derivative steel products will be subject to Section 232 duties of 25 percent.
As noted above, the Section 232 duties will be imposed with respect to Annex l and Annex ll products entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Standard Time on February 8, 2020. Section 232 duties for derivative aluminum products apply to all countries except Argentina, Australia, Canada and Mexico. Duties for derivative steel products apply to all countries except Argentina, Australia, Brazil, Canada, Mexico and South Korea.
Proclamation 9980 also provides that no drawback (19 USC 1313;19 CFR Part 191) shall be allowed with respect to the duties that are imposed on any derivative aluminum or steel products. Proclamation 9980 also provides guidance with respect to the dutiable status of merchandise imported and entered into the commerce of the U.S.
Somewhat surprisingly, Proclamation 9980 does not specify whether it will be possible for companies to submit exclusion requests to the U.S. Department of Commerce, as companies have previously been able to do for covered aluminum and steel articles. It is anticipated that, at some point in the future, the Commerce Department will announce that exclusion requests will be accepted for derivative aluminum and steel products. As such, companies that may wish to file exclusion requests relating to applicable products should consider reaching out to counsel with experience on such matters.
For More Information
If you would like further information about this Alert and the exclusion request submission process for products subject to Section 232 tariffs, please contact Brian S. Goldstein, Geoffrey M. Goodale, Michael E. Barnicle, any member of the International Practice Group or the attorney in the firm with whom you are regularly in contact.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.