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Aluminum and Steel Duty Update

Monday, March 26, 2018

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Source: Pisani & Roll LLP

With the March 23 effective date for additional 10 percent duties on aluminum and 25 percent duties on steel now having passed, U.S. Customs & Border Protection ("CBP") is monitoring and enforcing the new duties.  There also have been several key developments with regard to these duties.

First, the list of countries whose aluminum and steel products are not subject to additional duties has expanded.  The initial proclamations exempted only Canadian and Mexican aluminum and steel.  While not indefinite, the original proclamations did not have an explicit "expiration" date for these two countries exemptions.  Rather, the proclamations stated that the exemptions were due to renegotiation of the North American Free Trade Agreement ("NAFTA").   Last Thursday (March 22nd), the White House issued two (2) new proclamations (one for aluminum and one for steel) that:

  • expanded the list of countries whose products would be exempt from the new duties; and, 
  • set a May 1, 2018 "expiration date" for all product exemptions, including those for Canada and Mexico.  

Accordingly, the complete list of countries now exempted from the steel and aluminum duties (until May 1st) are:

  • Canada
  • Mexico
  • Australia
  • Argentina
  • Brazil
  • South Korea
  • European Union member countries (click on link for complete list of the 28 countries that comprise the European Union)

Second, and as we previously reported, the Commerce Department has established procedures for requesting product specific exclusions from the Sec. 232 duties.  It also indicated that it is not the Commerce Department's intent to have any exclusions apply only prospectively, but that they should apply retroactively as well.

"we have actually made a formal request to the customs and border patrol that they do what we call an escrow account ...this is quite commonplace between us and the customs and border patrol in the context of anti-dumping and countervailing duties. While the volume here might be a little more, it's a process with which they are familiar. We think it's only fair because it shouldn't be that just because there is a 90-day process that any manufacturer who is granted relief should not be stuck for the tariff during that 90 days."

Presumably, the above means that the exclusion will apply to unliquidated entries but the technical specifics have not been published yet.

Third, CBP has published some guidance regarding administration of the Sec. 232 duties. With regard to foreign trade zones, CBP has indicated that any aluminum or steel product subject to the duties may be admitted in to an FTZ, but must be done as "privileged foreign status".  This means that the Sec. 232 duties cannot be avoided through use of an FTZ since "privileged foreign status" is generally subject to duties when withdrawn from an FTZ based on the duty rates that applied upon entry into the FTZ. 

Additionally, ACE's quota functionality will be used to administer the Sec. 232 duties. Importers of merchandise subject to the Sec. 232 duties who fail to report the correct Chapter 99 tariff provisions on their entries will receive error messages that "sound" like they are for quota but are actually for the Sec. 232 duties:

E1 IQ10    LINE SUBJECT TO QUOTA                  
E1 FQ09   QUOTA NOT ALLOWED FOR ENTRY TYPE
E1 FQ05   BANNED IMPORT                          
E1 RF998 TRANSACTION DATA REJECTED

The correct Chapter 99 tariff provisions are 9903.80.01 (steel) and 9903.85.01 (aluminum). Each of these Chapter 99 tariff provisions also must be accompanied by the "regular" tariff provision that applies to the article.

Fourth, China has also published a link of U.S. goods that will be subject to additional duties upon importation into China.  This so-called retaliation list is expect to expand.

Lastly, at least one exporter (who also is the non-resident importer of its products) has initiated a lawsuit to challenge the legality of the steel duties.  In its complaint filed in the U.S. Court of International Trade ("CIT") on March 22, 2018, the exporter argues that the CIT should issue a temporary restraining order and ultimately enjoin the government from collecting the 25 Pisani & Roll LLP steel duties otherwise chargeable on the exporter's products.  According to the exporter, the 25 Pisani & Roll LLP steel duties are illegal because they exceed the President's authority since they were not truly done for national security purposes.


To learn more about the impact of the new duties, and how to protect your rights to potential refunds of any sec. 232 duties that you are paying, contact Pisani & Roll LLP at info@worldtradelawyers.com.

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