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President Donald Trump reinstated 25% tariffs on global steel imports in a Feb. 10, 2025, proclamation, “Adjusting Imports of Steel Into the United States.” In a second proclamation, Trump raised tariffs on global aluminum imports from 10% to 25%. These duties will take effect at 12:01 a.m. Eastern Standard Time on March 12, 2025, and are in addition to any antidumping (AD) or countervailing (CV) duties on products of China, or other applicable duties that may apply, impacting the construction, energy, food and beverage, and consumer product sectors.
Round 2 Terminates Agreements and Exemptions and Raises the Bar on Aluminum
In the steel and aluminum proclamations, Trump refers to the continued increase in imports and decrease in domestic production as threatening to impair U.S. national security to reinstate duties on global imports under section 232 of the Trade Expansion Act of 1962 (“section 232”).
The February proclamations terminate any prior arrangements with Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, and the United Kingdom that effectively suspended the section 232 duties on steel imports and those made with Argentina, Australia, Canada, Mexico, the EU, and the UK on aluminum imports.
The product exclusion process is terminated such that no new product requests may be considered and no renewals of previously granted requests are permitted. Holders of previously granted exclusions can benefit from the exemption until it expires or until the excluded product volume is imported, whichever occurs first. General approved exclusions are also terminated.
The proclamations cover steel and aluminum derivative products such as steel nails and tacks and aluminum cables and wire. The appendices to the proclamations, released Feb. 14, 2025 (Adjusting Imports of Steel Into the United States and Adjusting Imports of Aluminum Into the United States), contain an expanded list of derivative products including steel columns, beams, stranded wire, tubes, pipes, door and window frames, scaffolding, modular building units, containers for liquified gas, and aluminum household articles, doors and window frames, hinges and parts designed for motor vehicles, and more. Domestic producers and industry associations may request that additional products be covered if they establish imports have increased in a manner that threaten to impair national security.
Any covered steel product that is classified in Chapter 73 of the Harmonized Tariff Schedule of the U.S. (HTSUS) will carry the additional 25% tariff on the value of the declared product; covered steel products in other HTSUS chapters will carry the additional 25% tariff only on the steel component of the imported product.
Any covered aluminum product that is classified in Chapter 76 of the HTSUS will carry the additional 25% tariff on the value of the declared product; covered aluminum products in other HTSUS chapters will carry the additional 25% tariff only on the aluminum component of the imported product.
The proclamations exempt from the 25% duties downstream articles that were melted and poured, in the case of steel articles, or smelted and cast, in the case of aluminum articles, in the United States. Importers of downstream articles must show proof to receive exemption under new U.S. Customs and Border Protection (CBP) requirements.
CBP must prioritize evaluating classifications of covered steel and aluminum products and “assess monetary penalties in the maximum amount permitted by law and shall not consider any evidence of mitigating factors in its determination.”
Duty drawback, which enables importers and exporters to recover already paid duties, will not be allowed on the steel and aluminum tariffs. For shipments going to a foreign trade zone (FTZ), the date of arrival of shipments into the FTZ will be the date that determines any owing duty when the merchandise enters the commerce of the United States. This callout for FTZs obviates one of the major benefits of using an FTZ.
Key Takeaways: Steel
- Effective at 12:01 a.m. EST on March 12, 2025, steel products and certain downstream steel articles will be subject to a 25% tariff on entry or withdrawal from warehouse for consumption. The 25% duty is in addition to any other duties, fees, exactions, and charges applicable to the imported article.
- Section 232 arrangements with specific countries are terminated as of March 12, 2025, and as of 12:01 a.m. EST on March 12, 2025, imports will be subject to a 25% duty on entry or withdrawal from warehouse for consumption.
- The product exclusion process is terminated, effective Feb. 10, 2025. Granted product exclusions remain effective until their expiration date or until excluded product volume is imported, whichever occurs first.
- The exemption for steel articles imports from Ukraine is terminated and imports will be subject to the 25% duty.
- Additional downstream steel articles will be subject to the 25% duty, “except for derivative steel articles processed in another country from steel articles that were melted and poured in the United States.” Importers of steel derivative articles must provide any information necessary (i.e., melt and pour certification on mill test certificate or other proof) to identify the steel content used to manufacture the steel derivative articles being imported.
Key Takeaways: Aluminum
- As of 12:01 a.m. EST on March 12, 2025, aluminum products and certain derivative aluminum articles will be subject to a 25% tariff on entry or withdrawal from warehouse for consumption. The 25% duty is in addition to any other duties, fees, exactions, and charges applicable to the imported article.
- Section 232 arrangements with specific countries are terminated as of March 12, 2025, and as of 12:01 a.m. EST on March 12, 2025, imports will be subject to a 25% duty on entry or withdrawal from warehouse for consumption.
- Extends the 25% tariff to apply to additional derivative aluminum articles, unless the derivative aluminum article processed in another country was smelted and cast in the United States.
- Imports of derivative aluminum articles that contain “any amount of primary aluminum used in the manufacture of the derivative aluminum articles is smelted in Russia, or the derivative aluminum articles are cast in Russia,” are subject to a duty of 200%.
- Importers of aluminum derivative articles shall provide to CBP any information necessary to identify the aluminum content used in the manufacture of aluminum derivative article imports covered by the proclamation.
Reciprocal Tariffs in sight
The rules-based principle of the “most favored nation” (MFN) approach is that countries treat all trading partners equally. The lowest duty on a product granted to one country must be granted to imports of like products from all countries. The United States historically has abided by this cornerstone principle along with all trading partners who are World Trade Organization members.
On Feb. 13, 2025, President Trump issued a memorandum on “Reciprocal Trade and Tariffs” to the Secretary of Commerce and the U.S. Trade Representative to “initiate…all necessary actions to investigate the harm to the U.S. from any non-reciprocal trade arrangements adopted by any trading partners.” Upon completion, they are to submit a report to the President “detailing proposed remedies in pursuit of reciprocal trade relations.” Based on comments from the incoming Secretary of Commerce, any reciprocal tariffs may be imposed as early as April 2, 2025. The White House released examples of unfair trade: The U.S. tariff on ethanol is 2.5% and Brazil charges U.S. ethanol exports a tariff of 18%. The EU imposes a 10% tariff on imported cars; the U.S. tariff is 2.5%. Trump’s announcement also focuses on nontariff barriers, such as the EU’s value added tax (VAT) and Canada’s digital service tax.
Reciprocal tariffs effectively would raise tariffs on exports to the United States based on the level of tariffs or non-tariff barriers that the country imposes on U.S. imports. Aspects to follow include how Commerce proposes quantification of tariffs on a country-specific basis, particularly as to nontariff barriers; whether certain countries, like India, may negotiate their way out of reciprocal tariffs; how any reciprocal tariffs would apply to countries with which the United States has free trade agreements, and CBP enforcement considerations regarding tariff implementation.
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