Only UK Spared 50% Steel and Aluminum Tariffs
President Donald Trump said that although the 25% tariffs on steel, and the recently hiked aluminum tariffs, have "helped provide critical price support" to domestic producers, the rates are not high enough to enable them "to develop and maintain the rates of capacity production utilization that are necessary for the industries' sustained health and for projected national defense needs." So those rates will increase to 50% at 12:01 a.m. EDT June 4.
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Steel and aluminum items from the U.K. will continue to be taxed at 25%, at least through July 9. On or after that date, the proclamation says, the Commerce Department will construct import quotas for British products, as part of the U.S.-UK Economic Prosperity Deal, unless the commerce secretary decides the U.K. has not complied with the aspects of the deal that led the U.S. to offer that treatment. In that case, the proclamation says, tariffs on British aluminum and steel products may go to 50%.
The proclamation changes the approach to stacking for steel and aluminum products outside North America.
In April, CBP said that for derivatives covered by the action, the steel content of the product outside of Chapter 73 was subject to a 25% tariff, but the rest of the good's content was not subject to a 10% reciprocal tariff. “The entire value is exempt from the reciprocal tariffs,” the agency said then (see 2504300055).
For Harmonized Tariff Schedule numbers for derivatives covered by the action that contained no metal, reciprocal duties were still owed.
This proclamation said that all "non-aluminum, non-steel content of all aluminum and steel articles and derivative articles" owe reciprocal tariffs and any other applicable tariffs.
Up to this point, goods that could not meet USMCA rules of origin that were under these tariff headings paid the 25% emergency tariff, rather than the 25% Section 232 tariff. The language of the proclamation reverses that order, so that the goods will be subject to 50% Section 232 tariffs, but not an additional country-specific rate.
Although the changes were scheduled to take effect barely more than seven hours after the proclamation was published, none of the three annexes were released by our press time.
The products on the first two annexes aren't likely to change, but the way those products can be handled with regard to foreign-trade zones is different depending on which annex they are listed on.
For goods in Annex I, the goods admitted on or after June 4 may only be admitted into FTZs in privileged foreign status.
For goods on Annex II, if they are admitted into an FTZ by midnight June 3 in privileged foreign status, they will pay 50% when they enter into commerce, not the 25% still in place now, the proclamation says.
Drawback isn't eligible for goods subject to Section 232 tariffs.