On February 10, 2025, President Trump signed a proclamation that reinstated the 25% tariff on all steel and aluminum imports from all source countries based on the Section 232 action that President Trump originally initiated in 2018. This new proclamation has replaced all negotiated country-specific exemptions and quota regimes. In addition, general approved exclusions are being eliminated, and the product/importer-specific exclusions mechanism administered by the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce is being terminated. Existing exclusions will be honored until they expire or the approved quantity has been exhausted.
The changes are the following:
- Section 232 duties on aluminum and aluminum derivatives from all countries are increased to 25%.
- Country exemptions from the Section 232 duty of 25%, including absolute and tariff rate quota arrangements, will no longer be effective as of March 12, 2025, at 12:01 am. From that point forward, steel and aluminum articles and derivatives imported from all countries to the United States will be subject to a 25% duty.
- The existing product/importer-specific exclusion regime is terminated effective immediately.
- Derivative steel and aluminum articles produced in another country from steel or aluminum melted and poured in the United States are exempt from the 25% tariff on steel derivatives. The complete annex of covered products has not yet been published.
Further analysis of President Trump’s proclamation is provided below.
Legal Basis for The Tariffs
President Trump’s February 10, 2025, Proclamation essentially modifies the tariffs and exclusion process imposed pursuant to Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. § 1862). These tariffs were initially imposed by President Trump in 2018 and were subsequently modified in various respects during President Trump’s first term and later by President Biden.
The legal basis of these tariffs differs from the duties imposed on China, Mexico, and Canada on February 1, 2025, pursuant to the national emergency President Trump declared with respect to the illicit trafficking of fentanyl. Those tariffs were imposed pursuant to the International Emergency Economic Powers Act (“IEEPA”), 50 U.S.C. § 1701, and in the case of steel and aluminum imports, would be imposed in addition to the new Section 232 tariffs. However, to date, only the IEEPA tariffs on China have gone into effect.
Existing Country Quotas and Negotiated Settlements
President Trump’s February 10 Proclamation has terminated all existing negotiated settlements regarding Section 232 tariffs on steel and aluminum and their derivative products. Existing country exemptions, including import quotas, will no longer be effective as of March 12, 2025, at 12:01am.
The February 10 Proclamation rescinds the following arrangements, replacing them with a universal 25% tariff on all steel and aluminum and derivative products imported into the United States:
- Argentina Quota
- Australia Quota
- Brazil Quota
- South Korea Quota
- EU Tariff Rate Quota
- Japan Tariff Rate Quota
- United Kingdom Tariff Rate Quota
- Canada Exemption from 232 Tariffs
- Mexico Exemption from 232 Tariffs
- Temporary exemption for imports of steel and aluminum, and their derivatives from Ukraine
It is unclear whether the Trump administration will agree to negotiate new settlement arrangements with any of these countries.
Aluminum and Steel Derivative Articles
The February 10 Proclamation keeps in place the Section 232 duties on steel and aluminum derivative products that were identified in the President’s Proclamation 9980 of January 29, 2020. See 85 Fed. Reg. 5,282 at Annex I (aluminum derivatives) and Annex II (steel derivatives). The 10% Section 232 duty on aluminum derivatives is increased to 25%. The modification to steel and aluminum derivatives will be effective upon a publication by the Commerce Department that adequate systems are in place to collect the tariff revenue.
Additional Derivative Articles to Be Identified
The Proclamation also notes that the President will apply the 25% tariff to certain additional steel and aluminum derivative articles to be identified in an Annex to the February 10 Proclamation when it is published in the Federal Register. We anticipate that additional derivatives will include fabricated structural steel and prestressed concrete strand, based on products mentioned in the February 10 Proclamation.
Within 90 days of the February 10 Proclamation, or May 11, 2025, the Secretary of Commerce is instructed to establish a process by which domestic industry may petition to include an additional derivative article in the scope of the 25% duty. The February 10 Proclamation provides that the Secretary, upon receiving such a petition, must issue a determination whether or not to include the derivative article within 60 days of receiving the petition.
The 25% tariff on derivative products will not apply to articles further processed in another country from steel or aluminum that were melted and poured in the United States.
Product Exclusions Process
The February 10 Proclamation terminates the existing product exclusion process administered by BIS effective immediately, meaning that no company may apply for a new exclusion or for renewal of a previously granted exclusion. Previously granted product exclusions will remain effective until their expiration date or when the excluded volume has been imported, whichever occurs first.
All existing general approved exclusions will be terminated effective March 12, 2025.
Finally, no duty drawback will be available with respect to the duties imposed pursuant to the February 10 Proclamation.
Enforcement
The February 10 Proclamation requires that U.S. Customs and Border Protection “shall prioritize” monitoring of steel and aluminum imports to discover misclassifications of merchandise that result in non-payment of the Section 232 duties. If Customs discovers any such misclassification, it “shall assess monetary penalties in the maximum amount permitted by law and shall not consider any evidence of mitigating factors in its determination.”
Additionally, the February 10 Proclamation requires Customs to notify the Commerce Secretary of “any efforts to evade payment” of the Section 232 duties “through processing or alteration” of steel and aluminum articles or derivatives prior to importation. The February 10 Proclamation directs that the Commerce Secretary shall consider the processed or altered steel or aluminum articles or derivatives for inclusion as derivative articles.
