FAQ: U.S. Steel & Aluminum Tariffs
Prepare for March 2025: 20 Key Questions Answered on Trump’s Steel and Aluminum Tariffs to Help Businesses Stay Compliant
With U.S. trade policies under constant review, the upcoming implementation of the 25% steel and aluminum tariffs on March 12, 2025, raises many questions for businesses. Understanding these tariffs is crucial to avoid penalties and streamline your supply chain. Here, we address 20 of the most frequently asked questions about these tariffs, offering clear guidance on how to prepare and comply.
Questions We Will Answer in This Blog
What types of articles are subject to the 25% tariffs starting March 12, 2025?
How do the new tariffs differ from existing Section 232 tariffs?
Are products classified under Chapter 72 affected by the 25% tariffs?
Are "steel" and "aluminum" specifically defined in the Section 232 orders?
Are iron-based goods impacted by these tariffs?
Are goods made from steel or aluminum derivatives outside Chapters 73 and 76 subject to 25% tariffs?
How will our customs broker know which items are exempt from these tariffs?
What exceptions exist for aluminum and steel "articles" under the 25% tariffs starting March 12?
Are there any exceptions for aluminum or steel "derivative articles"?
10. How will we know if our “derivative article” is made from U.S. steel or aluminum?
11. How does the country of origin affect aluminum reporting?
12. Do we pay tariffs on the full value of a "derivative article"?
13. How is the value of aluminum or steel content calculated?
14. How will our broker calculate the tariff amount based on material content?
15. Will the new lists of "derivative articles" have the same exemptions?
16. Is drawback available for the 25% tariffs starting March 12?
17. Do headings in Chapter 98 provide relief from the 25% tariffs?
18. How do these tariffs apply to sets or kits under GRI 3(b) or 3(c)?
19. Is there a process for tariff exclusions?
20. Could the list of “derivative articles” expand in the future?
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1. What Types of Articles Are Subject to the 25% Tariffs Starting March 12, 2025?
The 25% tariffs apply to a broad range of steel and aluminum articles. This includes raw and finished steel and aluminum products, along with derivatives or processed forms of these metals. The tariffs aim to address national security concerns related to excessive imports. In addition, new derivative articles have been added under the 2020 and 2025 executive orders, expanding the scope of products covered.
2. How Do the New Tariffs Differ from Existing Section 232 Tariffs?
The new tariffs introduce significant changes:
Tariff-Rate Quotas (TRQs): TRQs that previously allowed limited quotas from certain countries have been removed.
Exemption Elimination: Exemptions for countries like Australia, Canada, Mexico, and Ukraine have been lifted, meaning goods from these nations are now subject to tariffs.
Aluminum Tariffs: The aluminum tariff rate increases from 10% to 25%, amplifying its impact, especially for imports not sourced from exempt countries.
3. Are Products Classified Under Chapter 72 Affected by the 25% Tariffs?
Yes, products under Chapter 72 (iron and steel) are subject to the 25% tariffs. This chapter covers various steel products, both raw and processed. With the removal of TRQs, there are no volume-based restrictions, but tariffs apply to steel imports from most countries.
4. Are "Steel" and "Aluminum" Specifically Defined in the Section 232 Orders?
Yes, steel and aluminum are generally defined based on commercial and tariff definitions. Steel refers to products made from iron mixed with carbon and other elements, while aluminum refers to products primarily composed of aluminum metal. Some derivative products, like alloys, may require clarification from U.S. Customs.
5. Are Iron-Based Goods Impacted by These Tariffs?
Pure iron (classified under Chapter 72) is generally not directly impacted. However, carbon alloy steel, based on iron, is covered, meaning products like carbon steel or alloyed steel are subject to the tariffs. Future U.S. Customs guidance may provide more specifics.
6. Are Goods Made from Steel or Aluminum Derivatives Outside Chapters 73 and 76 Subject to 25% Tariffs?
Yes, products containing steel or aluminum but classified outside Chapters 73 (steel) and 76 (aluminum) are subject to the tariffs. This includes items made from aluminum that fall under different tariff headings, like household products. If these items contain significant steel or aluminum, tariffs apply.
7. How Will Our Customs Broker Know Which Items Are Exempt from These Tariffs?
Customs brokers will rely on product classification and origin information, along with supporting documents, like invoices and material certifications. If steel or aluminum is sourced from an exempt country or meets certain criteria, brokers can assess potential exemptions.
8. What Exceptions Exist for Aluminum and Steel "Articles" Under the 25% Tariffs Starting March 12?
U.S.-origin steel and aluminum may be exempt if smelted and cast in the United States. However, U.S. Customs is finalizing guidance on these specifics, and suppliers must provide documentation proving U.S. origin materials.
9. Are There Any Exceptions for Aluminum or Steel "Derivative Articles"?
Derivative articles—products made from steel or aluminum—may be exempt if sourced from the U.S. or produced using U.S.-origin materials. These exemptions are still under review, with guidelines pending from U.S. Customs.
10. How Will We Know If Our “Derivative Article” Is Made from U.S. Steel or Aluminum?
Obtain specific documentation from your supplier, including invoices and material certifications that confirm the steel or aluminum origin. This documentation is essential for establishing the country of origin for tariffs.
11. How Does the Country of Origin Affect Aluminum Reporting?
For aluminum products, declare both the primary and secondary countries where the aluminum was smelted and cast, in addition to the final origin. This detail ensures accurate reporting as the U.S. targets materials based on their manufacturing process.
12. Do We Pay Tariffs on the Full Value of a "Derivative Article"?
No, tariffs apply only to the portion of a derivative article that contains steel or aluminum. For example, if a product primarily consists of another material but includes steel or aluminum, tariffs apply only to the value of those components.
13. How Is the Value of Aluminum or Steel Content Calculated?
The tariff percentage applies based on the weight or value of the steel or aluminum content in the product. For instance, if a product contains 24 ounces of steel, the tariff applies only to its value. Accurate documentation is required to calculate the metal portion.
14. How Will Our Broker Calculate the Tariff Amount Based on Material Content?
Your broker will depend on detailed material composition data provided by your supplier. This includes the percentage of steel or aluminum, as well as pertinent details regarding the weight or value of the metal. Proper documentation ensures the correct tariff rate is applied.
15. Will the New Lists of "Derivative Articles" Have the Same Exemptions?
The new derivative articles list may have different exemptions than past lists. Staying informed about updates is crucial, as the exemptions are subject to reviews. Any new changes will be published by the U.S. government.
16. Is Drawback Available for the 25% Tariffs Starting March 12?
No, drawback relief is not available for these Section 232 tariffs. While drawback exists for other duties, there is no implemented provision for steel or aluminum tariffs under the current executive orders. Importers need to plan accordingly.
17. Do Headings in Chapter 98 Provide Relief from the 25% Tariffs?
Chapter 98 does not provide relief from the tariffs for steel or aluminum products. This chapter covers specific categories and exemptions, but the Section 232 tariffs take precedence, meaning such articles will incur the new tariffs.
18. How Do These Tariffs Apply to Sets or Kits Under GRI 3(b) or 3(c)?
For goods classified as sets or kits under General Rule of Interpretation (GRI) 3(b) or 3(c), tariffs apply to all components containing steel or aluminum. This includes individual parts, regardless of how a set is classified. The presence of steel or aluminum in any component triggers the tariff.
19. Is There a Process for Tariff Exclusions?
The importer-specific exclusions process has been canceled, meaning companies can no longer apply for new exclusions on specific products. However, existing exclusions will remain in place until they expire. It is essential to monitor updates from the U.S. Trade Representative's office.
20. Could the List of “Derivative Articles” Expand in the Future?
Yes, the list of derivative articles could expand by May 11, 2025, as part of ongoing reviews by the Secretary of Commerce. If new derivative articles are identified, they will be included. Regular checks for updates are necessary to ensure compliance.
Conclusion
Understanding these tariffs is key to staying compliant and minimizing costs. With careful planning and communication with suppliers and customs brokers, businesses can avoid unexpected expenses. If you're unsure how these changes affect your business, consulting with a customs expert is wise.
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