The tariffs that President Trump announced on March 8 currently apply to steel and aluminum articles imported from all countries except Canada and Mexico, at least temporarily. Scheduled to take effect on or after 12:01 a.m. on March 23, the tariffs will be applied to goods entered, or withdrawn from warehouse to consumption. The rate of duty is in addition to any other duties, fees, exactions, and charges applicable to such imported steel and aluminum.
The steel tariffs of 25% cover a wide range of steel products, classified under the Harmonized Tariff Schedule (HTS) 6-digit levels 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90.
The aluminum tariffs of 10% cover products falling under HTS headings for (a) unwrought aluminum (HTS 7601); (b) aluminum bars, rods, and profiles (HTS 7604); (c) aluminum wire (HTS 7605); (d) aluminum plate, sheet, strip, and foil (flat rolled products) (HTS 7606 and 7607); (e) aluminum tubes and pipes and tube and pipe fitting (HTS 7608 and 7609); and (f) aluminum castings and forgings (HTS 7622.214.171.124 and 76126.96.36.199).
U.S. Companies Request Exclusions as of Monday
On Monday, the Commerce Department issued an interim final rule for how automakers, pipeline operators, food packagers and other companies can seek exemptions from the tariffs that could be worth billions of dollars. Companies located in the United States can ask Commerce for an exemption from the tariffs if the product is “not produced in the United States in a sufficient and reasonably available amount of a satisfactory quality,” or on national security grounds. The rule encourages companies seeking a break from the tariffs to focus their applications on the availability of the product in the U.S.
Approved exclusions will be product-specific and limited to the company that made the request, unless Commerce approves a broader application to additional importers. The review period for such requests normally will not exceed 90 days, including adjudication of objections submitted by domestic steel and aluminum producers. The Commerce Department is expecting around 4,500 individual requests, approximately 1,500 of which would draw objections.
Carve Outs for Additional Countries
In addition to Canada and Mexico, the proclamations left the door open for other countries with which the U.S. has a security relationship to negotiate different terms with the President to remove or modify restrictions on that county. This in turn could allow the President to make any corresponding adjustment to the tariff as it applies to other non-excluded countries to meet the President’s import goals. Therefore, it is difficult to know the final impact until all carve-outs are known for sure and the final adjustments to the tariffs have been implemented. The European Union, South Korea, Australia, Argentina and Brazil are currently seeking exemptions.
Potential Impact on Trade with the European Union
The EU is the second-largest foreign supplier of steel and aluminum to the United States, behind Canada. If the EU is not exempted from the tariffs, its Trade Commissioner has already articulated that the EU will impose its own restrictions as a rebalancing measure. This past Friday, the EU published a 10-page list of hundreds of American products that it could target if the U.S. moves forward with the steel and aluminum tariffs. The list includes cigarettes, motor boats and vessels for pleasure or sports, textiles, motorcycles, and agricultural products. However, on Wednesday of this week, the Commerce Secretary and EU Trade Commissioner issued a joint statement that they have agreed to launch trade talks in an effort to reach "mutually acceptable outcomes as rapidly as possible."
In addition to the EU, the US is currently engaged in discussions with several countries to determine if means other than tariffs can be arranged to address the national security concerns underlying the tariffs. The tariffs are also the subject of current discussions between the U.S., Canada and Mexico over changes to NAFTA. We will closely monitor and report on further developments as they occur.