Trade Update
Special Section 232 Duties – Requesting Product Exemptions

April 11, 2018

In our newsletter of March 12, 2018, we advised you of President Trump’s Proclamations imposing special section 232 duties on certain steel (25%) and aluminum (10%) products. In an interim final rule published March 19, 2018 (83 FR 12106), the Department of Commerce set forth the requirements and procedures on how parties may submit requests for exclusions from the special section 232 duties.  Currently, 758 steel and 107 aluminum exclusion requests have been filed.   

Approved exclusions will be made on a product basis and will be limited to the individual or organization that submitted the specific exclusion request, unless Commerce approves a broader application of the product based exclusion to additional importers.

Section 232 Duties on Certain Steel and Aluminum Products – Temporary Waivers

These special 232 duties went into effect on March 23, 2018, and, except for imports from South Korea, temporary waivers have been granted to Canada, Mexico, Australia, Argentina, Brazil and member countries of the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom) that will end on May 1, 2018.  See CSMS# 18-000240 - Additional Duty on Imports of Steel and Aluminum Articles under Section 232.

Steel articles subject to the 25% tariff are described the Harmonized Tariff Schedule (HTS) subheadings:

• 7206.10 through 7216.50,
• 7216.99 through 7301.10,
• 7302.10, 7302.40 through 7302.90, and
• 7304.10 through 7306.90.

“Aluminum articles” subject to the 10% tariff are described in HTS subheadings:

• unwrought aluminum (HTS 7601),
• aluminum bars, rods, and profiles (HTS 7604),
• aluminum wire (HTS 7605),
• aluminum plate, sheet, strip, and foil (flat rolled products) (HTS 7606 and 7607),
• aluminum tubes and pipes and tube and pipe fitting (HTS 7608 and 7609), and
• aluminum castings and forgings (HTS 7616.99.51.60 and 7616.99.51.70).

How to File Requests for Product Exclusions

The Presidential Orders provide that the Department of Commerce may, in consultation with other U.S. agencies, grant exclusions from the duties for domestic parties affected by the special duties if it is determined the steel or aluminum article for which the exclusion is requested is not produced in the United States in a sufficient and reasonably available amount or of a satisfactory quality, or should be excluded based upon specific national security considerations.

Instructions on how to apply for product exclusions were set out in an interim final rule published March 19, 2018. The interim final rule set forth the requirements and procedures for how parties may submit requests for exclusions from the special section 232 duties, and how parties may submit objections to the granting of exclusion requests. The determination process is described as follows:

• Exclusion requests must be filed electronically on Regulations.gov.
• Companies must submit separate requests for each product, even if products are covered by the same 10-digit HTS subheading.
• Parties will have 30 days to file objections to these requests.
• BIS approximates that it will take 60 days following the deadline for filing objections to make a determination, with the total processing time estimated at 90 days. (Note that the deadline for BIS's decision on exclusions is not a mandatory deadline.)
• Approved exclusions will be effective 5 business days following the publication of BIS's decision on the Regulations.gov website.
• Exclusions will generally be approved for one year, requiring renewed application for exclusions beyond that period.
• The interim final rule does not elaborate on the exclusion criteria that will be applied to determine if an exclusion should be granted.

The interim final rule states that all requests and comments regarding requests are subject to public disclosure.

Only individuals or organizations using the steel or aluminum articles identified in the Proclamations in a business activity (e.g., construction, manufacturing, or supplying steel or aluminum to users) in the United States may submit exclusion requests. Approved exclusions will be made on a product basis and will be limited to the individual or organization that submitted the specific exclusion request, unless Commerce approves a broader application of the product-based exclusion request to apply to additional importers.

Individuals or organizations that wish to submit an exclusion request for a steel or aluminum product already approved for exclusion may also submit an exclusion request. Subsequent requesters for an exclusion are not required to reference a previously approved exclusion, but Commerce may take that into account when reviewing a subsequent exclusion request. In addition, individuals and organizations will not be precluded from submitting a request for exclusion of a product where a previous exclusion request for the same product had been denied or is no longer valid. For example, it might be that the first exclusion request was inadequate to demonstrate the criteria were met for approving that exclusion request. The later requester should, however, submit new or different information in an attempt to meet the criteria for approving an exclusion request for that product.

Both Section 232 and 301 tariffs are in addition to other general or special duties that may apply. It is important to remember that special duties – such as antidumping and countervailing (ADD/CVD) – continue to be a high priority issue in the international trade arena. Regardless of the impact made by the above tariffs, CBP continues to actively monitor and audit high-risk antidumping and countervailing activity.

How Can We Help?

As a company you need to understand the potential impact of Section 232 and 301 tariffs and whether your products have any ADD/CVD risks. Utilizing your company's ACE data and our analytical tools, our team of former U.S. Customs Regulatory Auditors can provide you with an import data risk assessment identifying high-risk import activity and a range of potential duties owed.

We can also help you explore the possibility of whether your product will qualify for specific exclusions from the Special 232 duties, as provided for in the implementing guidelines (see below for more information on this).

More Information

Information on how to apply for a steel product exclusion request can be found at https://www.regulations.gov/docket?D=BIS-2018-0006. The steel exclusion request form can be found at https://www.regulations.gov/document?D=BIS-2018-0006-0002. An exclusion request guide is available at https://www.regulations.gov/document?D=BIS-2018-0006-0011.

Information on how to apply for an aluminum product exclusion request can be found at: https://www.regulations.gov/docket?D=BIS-2018-0002. The Steel exclusion request form can be found at https://www.regulations.gov/document?D=BIS-2018-0006-0002. An exclusion request guide is available at https://www.regulations.gov/document?D=BIS-2018-0002-0009

For further information or questions about this or other customs issues, please contact George Tuttle, III, at george.tuttle.iii@tuttlelaw.com or 415-986-8780.

George R. Tuttle, III is an attorney with the Law Offices of George R. Tuttle in the San Francisco Bay Area.

The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

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