U.S. Government Issues New Guidance On Section 232 Tariffs
On Dec. 3, U.S. Customs and Border Protection (CBP) issued new guidance regarding valuing steel, aluminum, and copper content for purposes of calculating the Trump administration’s Section 232 tariffs. As the trade team at Husch Blackwell explained, CBP’s guidance clarifies that, for products made wholly of steel and aluminum, these penalties are assessed on the full entered value of the article and that value must include manufacturing and labor costs, which cannot be subtracted from the entered value. (This guidance also applies to articles containing copper or brass that are subject to separate Section 232 tariffs.)
For derivative articles that are not wholly made of steel or aluminum, the Section 232 tariffs are assessed on the steel or aluminum content of the finished article, Husch Blackwell explained. The steel or aluminum content is based on “the invoice paid by the buyer of the steel/aluminum content to, or for the benefit of the seller of the steel/aluminum content.” In other words, companies may not subtract fabrication, machining, labor, and other costs to arrive at the price of the raw steel or aluminum. The value also must include the costs of surface treatments like galvanizing and anodizing, along with the costs of painting, lacquering, or coating. For copper, the value of the alloying elements cannot be deducted, but packing costs may be apportioned across the metal and non-metal content.
Husch Blackwell advised that where the value of the steel and aluminum content cannot be determined, importers should report the duty based on the total entered value on one entry summary line. Read the full summary.
As a reminder, when it comes to Section 232 tariffs, Connecting the Dots reports developments for members’ information only. MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, MSCI has advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA). MSCI also asked that Canada and Mexico be excluded from any trade penalties.
Click here to review all of MSCI’s advocacy on Section 232 tariffs.