Pdf icon
Related Sectors & Services

Section 232 Tariff Exclusion Process Explained

On March 19, 2018, the Department of Commerce (“DOC”) published a notice of interim rules for requesting exclusions from the new Section 232 tariffs on imported steel and aluminum. These tariffs, 25% on steel and 10% on aluminum, were proclaimed on March 8, 2018 by President Trump under section 232 national security provisions and will go into effect on March 23, 2018.

For users of the imported products, the DOC’s notice provides important information about the product exclusion process. Since the exclusions are not retroactive, time will be of the essence in submitting the applications and their expeditious review by the DOC. 

A separate process for exempting countries from the tariffs will be handled largely by the office of the United States Trade Representative. Based on the March 8 proclamations, Canada and Mexico are currently excluded and additional countries will be considered based on their security relationship with the United States, among other factors.

Comments

Since these are interim rules, interested parties will have an opportunity to comment on them by May 18, 2018. In the meantime, the announced rules are in effect and provide instructions on how to apply for exclusions from the tariffs. The application process is the same for both steel and aluminum products.

Applications

  • Applications must be submitted using forms available on the DOC’s website. A separate exclusion request must be filed for each distinct type or dimension of imported steel or aluminum product.
  • Only individuals or organizations operating in the United States that use the subject steel or aluminum in their business activities can submit the applications. The forms require information that is specific to the applicant, including the importer of record, parent company, business activity, shipment details, product chemistry and specifications, and industry standards, among others.
  • Exclusions will be made on a product basis and will be limited to the applicant, unless the DOC broadens the exclusion to include other users.
  • The DOC is authorized to grant exclusions from tariffs if the steel or aluminum products are determined not to be produced in the United States in a sufficient quantity and reasonably available amount or of satisfactory quality, or based upon specific national security considerations. To be successful, applications will need to provide sufficient supporting information covering these factors.
  • The submitted applications will be made available to the public. Applicants that submit confidential information with their requests will need to specifically request proprietary treatment. 
  • Application reviews will normally not exceed 90 days. But given the expected high demand for exclusions, this review period may be longer.
  • Approved exclusions will be effective five business days after the DOC’s determination.
  • The DOC will issue an identifier for each approved exclusion request to Customs and Border Protection (“CBP”). Importers will need to present these identifiers with the shipment documentation to CBP to determine if the shipment qualifies for exclusion from the tariffs.

Objections

The interim rules also provide an opportunity for interested parties to submit objections to the exclusion requests within 30 days of their filing. These objections can be submitted through separate DOC forms and will be available for public disclosure.

If you have any questions regarding this action and its potential implications, please contact Mark Ludwikowski, Kevin Williams or another member of Clark Hill’s International Trade Practice Group.