Here is a collection of information for you to be able to prepare your shipments to accurately declare and minimize the tariff to just the aluminum and steel
What’s section 232
Section 232 of the Trade Expansion Act of 1962, as amended, authorizes the President to take action to adjust the imports of an article and its derivatives if the President concurs with the Secretary’s finding that the article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.
What’s changed.
What’s different with this expanded edition is that it includes derivatives which means that not only raw steel and aluminum but also finished products that contain in whole or in part will be subject to the 25% tariff. (I will explain shortly ho to distinguish)
This tariff is worldwide, even the countries where the US maintains free trade status will be subject to the expanded section 232,
Even the countries that were exempt from the section 232 back in 2018 will now be subject to the section 232 tariff including but not limited to: Argentina, Australia, Brazil, Canada, (meeting scheduled for later this week, details to follow) EU, UK, MX, Ukraine, South Korea.
Some importer specific exclusions will remain in effect but the general exclusions previously in place are all terminated effective today March 12
The section 232 tariff will not be eligible for duty draw back (if re-exported the duties will not be refundable)
The section 232 also eliminates FTZ entries, with the recent expanded edition, FTZ shipments will only enter as privileged foreign status which means that yes, the duties and tariffs will be deferred until withdrawal for consumption, but if the goods are modified in the FTZ in a form that would make it under other circumstances eligible for duty free treatment will now be ineligible and the full tariff will be applicable upon withdrawal for consumption.
How to declare derivatives within a specific product.
Until now, if your product was a tumbler you had a HTS for tumbler (7323.93.0080) and you would declare the value for each tumbler and pay the appropriate duties and tariffs.
Now if you have a tumbler that is made of a mixture of silicon and metal or rubber you will have to break down the value and weight for the metal part in a separate line item, lets say each tumbler price is $10, $5 for the metal and $5 for the silicon and then the weight would be 33 KG for each tumbler, 2 for the metal and 1 for the silicon.
You would list the value for the silicon in line item 1 and leave the weight out, list the total quantity of the shipment and then on line number 2 you would list the $5 for the steel and the total weight based on 2KG per each tumbler.
If the item is made in whole from steel or aluminum you would just list one line and have the appropriate tariff for the full value of the shipment.
Like I said earlier, this is not limited to just chapter 73 of the schedule B HTS code, it’s the full chapter 73 for steel, and some of chapter 84 and 94 and for aluminum it will be most of chapter 76 but will also be some of chapters 66, 83, 84, 85, 87, 88, 90, 94, 95 and 96 (chapters are the first 2 of the ten digit HTS code so to my example earlier the tumbler has a code of 7323.93.0080 which puts it under chapter 73).
It is important to point out that customs will publish additional guidance on how to separate the value for steel and aluminum derivatives but for now the above can be considered in compliance. However, because many will try to exploit and minimize the value of the steel and maximize the value of the alternative it is important to have proper documentation and proof (whenever possible) so that if and when customs questions it you can easily prove that you had a structured composition breakdown on what to base your value for each component. (most of the manufacturers should be able to help you run these numbers easily).
I will publish in the next few days more articles on the other tariff topics that we are dealing with, I am committed to bringing you actionable and real guidance, based on the resources available.
