For more insights and analysis from Cleary lawyers on policy and regulatory developments from a legal perspective, visit What to Expect From a Second Trump Administration.
On February 10, President Trump issued proclamations (the “Proclamations”) imposing and expanding 25% tariffs on imported steel and aluminum products under Section 232 of the Trade Expansion Act of 1962 (“Section 232”). As discussed in our previous blog post (available here), the first Trump administration imposed tariffs on steel and aluminum products under Section 232, but numerous countries subsequently received exemptions from the tariffs. The Executive Order re-imposes tariffs on all countries that previously received exemptions, increases tariffs on aluminum from 10% to 25%, and re-expands the scope of existing tariffs on steel and aluminum to cover derivative steel and aluminum products. The new steel and aluminum tariffs will go into effect on March 12, 2025; details regarding the new tariffs will be published in the Federal Register within ten days of March 12.
In imposing 25% tariffs on all steel and aluminum imports, President Trump referred back to the findings of the Section 232 investigations into steel and aluminum conducted under the first Trump administration. Those reports found that steel and aluminum were each essential to U.S. national security, and that imports of both products “threaten to impair” U.S. national security.[1] The White House explained that reimposition and expansion of steel and aluminum tariffs was necessary because the previous tariff impositions had yielded positive results, with domestic steel and aluminum capacity utilization increasing under the tariffs and declining as exemptions were granted. Further, the White House claimed that exemptions granted to Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom reduced the efficacy of the tariffs, in part by “creat[ing] loopholes that were exploited by China and others with excess steel and aluminum capacity, undermining the purpose of these exemptions.” No new exclusion requests will be accepted under the Proclamations, and all general approved exclusions will terminate on March 12, 2025.[2]
In addition to terminating country-specific exemptions and increasing tariffs on aluminum, the Proclamations again expand the scope of the original steel and aluminum tariffs to cover derivative steel and aluminum products, which were previously subject to Section 232 tariffs.[3] Further, the Proclamations require that the U.S. Department of Commerce establish a process pursuant to which domestic steel and aluminum producers can identify additional derivative steel and aluminum products to be added to the list of products subject to tariffs on an ongoing basis.
The Proclamations also direct the U.S. Department of Homeland Security, Customs and Border Patrol (“CBP”) to “prioritize reviews” of tariff classifications of imported steel and derivative steel products to identify misclassifications and to impose penalties for any such misclassifications. Importers of steel and aluminum derivatives will also be required to provide CBP with any information necessary to identify content used in manufacturing the derivative articles and to assess maximum monetary penalties for duty evasion.
Cleary’s international trade team is continuing to track developments on the Trump administration’s tariff policy, and is available to provide guidance on navigating the impact of the new tariffs on steel and aluminum.
[1] Public versions of DOC’s Section 232 reports on steel and aluminum are available on DOC’s website here (steel) and here (aluminum).
[2] The Proclamations allow granted product exclusions to remain effective until the earlier of their expiration date or the time at which the excluded product volume is imported.
[3] The list of derivative aluminum and steel products covered by the expanded tariffs will be available upon publication of the Federal Register notice. However, it is possible that similar derivative products will be identified as in Proclamation 9980 (January 2020) that previously imposed Section 232 tariffs on derivative steel and aluminum products.