New U.S. Tariffs on Steel and Aluminum Derivatives: What Importers Need to Know

Introduction

The global trade landscape is continuously evolving, and staying informed about the latest changes in tariffs and regulations is crucial for businesses engaged in international commerce. A recent development that has caught the attention of importers and logistics professionals is the announcement of new U.S. tariffs on steel and aluminum derivatives. These changes, set to take effect in the coming months, will have significant implications for a wide range of industries and product categories.

In this comprehensive article, we will delve into the details of these new tariffs, exploring their scope, implementation dates, and potential impact on businesses. We will also discuss how digital logistics solutions like FreightAmigo can help companies navigate these complex changes and optimize their supply chain operations in the face of evolving trade policies.

Key Points of the New Tariff Changes

Before we dive into the specifics, let’s outline the main points of the upcoming tariff changes:

• New tariffs will apply to a broader range of steel and aluminum derivative products
• The effective date for most changes is March 12, 2025
• Steel derivative articles will continue to face a 25% additional duty
• Aluminum derivative articles will see an increase from 10% to 25% in additional duty
• Special considerations apply for products with U.S.-sourced metal content
• The Department of Commerce will establish a process for identifying additional derivative products for inclusion

Expanded Scope of Affected Products

One of the most significant aspects of these new tariffs is the expanded range of products that will be subject to additional duties. The changes affect products across multiple Harmonized Tariff Schedule of the United States (HTSUS) chapters, including but not limited to:

Steel Derivatives

The 25% tariff will apply to the full value of products in Chapter 73, effective March 12, 2025. For articles in other chapters, the 25% tariff will be applied to the steel content, with the effective date to be determined. Some notable additions include:

• Construction, manufacturing, and industrial products
• Stoves, ranges, barbecues, and other appliances
• Table, kitchen, or other household articles, including cookware
• Parts of certain elevators, escalators, and cranes
• Agricultural and horticultural machinery parts
• Metal furniture and prefabricated buildings

Aluminum Derivatives

Similar to steel, the 25% tariff will apply to the full value of products in Chapter 76, effective March 12, 2025. For articles in other chapters, the 25% tariff will be applied to the aluminum content, with the effective date to be determined. Some key additions include:

• Table, kitchen, or other household articles, including cookware
• Fasteners and luggage frames
• Parts of air conditioners, refrigerators, and other appliances
• Parts of motors, vacuum cleaners, and electrical apparatus
• Vehicle parts, including bumpers and powertrains
• Sporting equipment and accessories

Implementation Dates and Duty Rates

The implementation of these new tariffs will occur in two phases:

March 12, 2025

The additional duty will apply to steel articles and derivative steel articles in Chapter 73, as well as aluminum articles and derivative aluminum articles in Chapter 76. The rates will be as follows:

• Steel articles and derivative steel articles: 25% (unchanged)
• Aluminum articles and derivative aluminum articles: 25% (increased from 10%)
• Aluminum articles and aluminum derivative articles from Russia: 200% (unchanged)

Date To Be Determined

For derivative steel and aluminum articles in other affected chapters, the additional duty will apply to the metal content value. The effective date for these changes will be announced after the Department of Commerce confirms that adequate systems are in place to declare and collect the associated duties.

Challenges for Importers

These new tariff changes present several challenges for importers, particularly in the following areas:

Metal Content Determination

One of the most significant hurdles for importers will be the process of ascertaining, certifying, and declaring the metal content source and value for articles not in Chapters 73 or 76. This information is crucial for limiting the tariff assessment to the metal content or exempting the product based on U.S. content. Importers should anticipate that this process will be cumbersome and may require them to pay the duty on the full product value if they are unable to properly determine the source and value of the metal content.

Multiple Tariff Layers

As additional tariffs are added, importers need to be mindful of all applicable duties. For example, articles from China on these lists may be subject to:

• The regular duty rate
• Section 232 duties of 25%
• Section 301 duties of 25% or 7.5%
• New IEEPA duties of 10%
• Antidumping and/or countervailing duties
• Potential future reciprocal tariffs

Navigating these multiple layers of tariffs will require careful attention to detail and a thorough understanding of the applicable regulations.

Elimination of Exemptions and Exclusions

The new tariff changes also bring about the elimination of certain exemptions and exclusions:

• All country exemptions are eliminated
• All general approved exclusions are eliminated
• Product exclusions: Effective February 10, 2025, the Department of Commerce will not consider or renew any product exclusion requests. Exclusions already granted will remain effective until their expiration date or until the excluded product volume is imported, whichever occurs first.

Important Considerations for Importers

As we approach the implementation of these new tariffs, importers should keep the following points in mind:

Foreign Trade Zones (FTZs)

On the respective effective dates, admissions to an FTZ must be admitted as privileged foreign status, unless eligible for admission under domestic status. This change may impact current FTZ strategies and require adjustments to inventory management practices.

Penalties

U.S. Customs and Border Protection (CBP) will prioritize reviews of entries of steel and aluminum and derivative articles. If misclassification resulting in non-payment of these duties is discovered, CBP will assess monetary penalties in the maximum amount permitted by law. The steel Executive Order specifies that CBP shall not consider any evidence of mitigating factors in its determination.

Additionally, CBP will notify the Department of Commerce regarding evidence of any efforts to evade the steel or aluminum duties through processing or alteration of steel or aluminum articles or derivative steel or aluminum articles prior to importation. In such cases, Commerce will consider the articles for inclusion as derivative steel or aluminum articles.

Drawback

No drawback of these duties will be permitted. This limitation may impact the financial calculations for companies that typically rely on drawback programs to offset import costs.

Navigating the New Tariff Landscape with Digital Logistics Solutions

As the global trade environment becomes increasingly complex, businesses need robust tools and strategies to manage their supply chains effectively. Digital logistics platforms like FreightAmigo offer a range of solutions to help companies adapt to these changes and optimize their operations:

1. Real-time Tariff Information and Calculations

With frequent updates to tariff rates and product classifications, having access to real-time information is crucial. Digital logistics platforms can integrate the latest tariff data, allowing importers to quickly calculate the total landed cost of their shipments, including all applicable duties and fees. This capability enables businesses to make informed decisions about sourcing and pricing strategies.

2. Automated Classification and Documentation

Given the expanded scope of products affected by these new tariffs, ensuring accurate classification of goods is more important than ever. Digital platforms can leverage artificial intelligence and machine learning algorithms to assist with product classification, reducing the risk of errors and potential penalties. Additionally, these systems can automate the generation of required customs documentation, incorporating the necessary information about metal content and origin for affected products.

3. Supply Chain Visibility and Analytics

To effectively manage the impact of these tariff changes, companies need comprehensive visibility into their supply chains. Digital logistics platforms provide real-time tracking of shipments and inventory levels, allowing businesses to make data-driven decisions about routing, inventory management, and supplier selection. Advanced analytics tools can help identify opportunities for cost savings and efficiency improvements in the face of changing tariff structures.

4. Compliance Management

With the elimination of certain exemptions and exclusions, ensuring compliance with the new tariff regulations is paramount. Digital platforms can help businesses stay compliant by providing up-to-date regulatory information, automated compliance checks, and audit trails for all shipments. This comprehensive approach to compliance management can help minimize the risk of penalties and delays.

5. Flexible Routing and Mode Selection

As businesses adapt to the new tariff landscape, they may need to explore alternative sourcing options or transportation routes. Digital logistics platforms offer powerful tools for comparing and optimizing different shipping options, taking into account factors such as transit times, costs, and applicable duties. This flexibility allows companies to quickly adjust their supply chain strategies in response to changing market conditions.

6. Collaboration and Communication

Effectively managing the impact of these tariff changes requires close collaboration between various stakeholders, including suppliers, carriers, customs brokers, and internal teams. Digital platforms facilitate seamless communication and data sharing among all parties involved in the supply chain, ensuring that everyone has access to the most up-to-date information and can respond quickly to any issues or changes.

Preparing for the Future

As we look ahead to the implementation of these new tariffs, it’s clear that businesses will need to be proactive in adapting their supply chain strategies. Here are some key steps that importers can take to prepare:

1. Conduct a Thorough Product Review

Review your entire product catalog to identify items that may be affected by the new tariffs. Pay particular attention to products containing steel or aluminum components, even if they are not classified under Chapters 73 or 76.

2. Evaluate Sourcing Strategies

Consider alternative sourcing options, including domestic suppliers or countries not subject to these additional duties. Assess the potential impact on your costs and lead times, and develop contingency plans as needed.

3. Enhance Data Management Processes

Improve your systems for tracking and documenting the origin and metal content of affected products. This information will be crucial for accurately declaring and paying the appropriate duties.

4. Invest in Digital Logistics Solutions

Consider implementing or upgrading to a comprehensive digital logistics platform that can help you navigate these complex changes. Look for solutions that offer real-time tariff information, automated classification tools, and robust analytics capabilities.

5. Stay Informed

Keep abreast of any updates or clarifications from the Department of Commerce and U.S. Customs and Border Protection. Attend industry webinars and conferences to learn best practices for managing these new tariffs.

6. Consult with Experts

Consider working with customs and trade experts who can provide guidance on compliance strategies and help you optimize your import processes in light of these changes.

Conclusion

The upcoming changes to U.S. tariffs on steel and aluminum derivatives represent a significant shift in the trade landscape, presenting both challenges and opportunities for businesses engaged in international commerce. By staying informed, leveraging digital logistics solutions, and taking proactive steps to prepare, companies can navigate these changes successfully and maintain a competitive edge in the global marketplace.

As we move closer to the implementation dates, it’s crucial for importers to closely monitor developments and adjust their strategies accordingly. With the right tools and approach, businesses can turn these challenges into opportunities for growth and innovation in their supply chain operations.

At FreightAmigo, we are committed to helping our clients navigate the complexities of global trade with our comprehensive digital logistics platform. By combining cutting-edge technology with deep industry expertise, we empower businesses to optimize their supply chains, reduce costs, and stay ahead of regulatory changes. As the trade landscape continues to evolve, we stand ready to support our clients in adapting to new challenges and seizing new opportunities in the world of international logistics.