On March 8, 2018, President Trump ordered the imposition of a 25 percent tariff on steel imports on “covered steel products” (listed below) and a 10 percent tariff on the “covered aluminum products” (also below). These tariffs were put in place because investigations by the Department of Commerce concluded that the covered products were being imported in such quantities as to “impair the national security of the United States.”
The tariffs went into effect on March 23, 2018.
On March 22nd, the Trump Administration announced the steel and aluminum tariffs were suspended until May 1st for Argentina, Australia, Brazil, all member countries of the European Union, and South Korea. These countries were exempted because each has an “important security relationship” with the U.S. and follow the exemptions for Canada and Mexico. Canada, Brazil, South Korea, Mexico, and the EU are all in the top-ten steel exporters to the U.S., and much of the aluminum we use in our products come from Canada and other countries currently exempt from the tariffs. These exemptions, should they be extended beyond May 1st, could mean that the tariffs are far more limited in scope than the initial announcement.
On March 19, 2018, the U.S. Department of Commerce published the procedures to request exclusion from the steel and aluminum tariffs in the Federal Register. This process allows “affected users” to apply for exclusions of specific products if they are “not to be produced in the United States in a sufficient and reasonably available amount, or not of satisfactory quality, or meets a specific national security specification. We provide an overview of the process for applying for the tariffs below.
Steel Products Covered
The U.S. government imposed a 25% tariff on the following steel products beginning March 23, 2018:
- ingots, flat-rolled steel, bars and rods, other shapes (Harmonized Tariff Schedule (HTS) codes 7206.10-7216.50)
- wire, stainless steel ingots and other primary forms, semi-finished stainless steel products, bars, rods, wire, and flat-rolled stainless steel products, alloys, sheet piling (HTS codes 7216.99-7301.1);
- rails (HTS code 7302.10);
- fish-plates and sole plate (HTS codes 7302.40-7302.90); and
- tubes and pipes (HTS Codes 7304.10-7306.90).
Aluminum Products Covered
The U.S. government imposed a 10% tariff on the following aluminum products beginning March 23, 2018:
- unwrought aluminum (HTS subheading 7601);
- aluminum bars, rods, and profiles (HTS subheading 7604);
- aluminum wire (HTS subheading 7605);
- aluminum plate, sheet, strip, and foil (flat-rolled products) (HTS subheadings 7606 and 7607);
- aluminum tubes and pipes and tube and pipe fitting (HTS subheadings 7608 and 7609); and
- aluminum castings and forgings (HTS codes 7618.104.22.168 and 7622.214.171.124).
The rules published by the Dept. of Commerce state that individuals or organizations operating in the United States that use the listed steel and aluminum products in business activities may submit exclusion requests. The rules do not provide a definition of what using products in business activities. Instead, the rules state using the listed products in construction or manufacturing or supplying steel/aluminum products to users in the United States are examples of business activities.
For brewers, these limited application guidelines do not provide a definitive answer as to whether your existing business activities will qualify you as “affected users,” as most brewers do not use the listed products in construction or manufacturing, nor do they supply steel and aluminum products to users. This raises the possibility that any exclusion application filed by a brewer could be rejected. Further, this definition appears to exclude associations of companies, making it unlikely that Commerce would accept an exclusion request from the Brewers Association on behalf of its members. We will keep you apprised as the Commerce Department provides additional information on the exemption application process.
The steel and aluminum exclusion request forms require substantial information, including the following:
- Information about the requesting organization, any parent companies, and the importers of record;
- A complete description of the product, including the chemical composition, and the relevant HTS codes;
- The total requested annual exclusion quantity;
- Annual average consumption of the product between 2015-2017;
- The country of origin of the product you are requesting exclusion for, along with the current manufacturer and supplier;
- The current product availability in the United States and whether the requestor purchased or attempted to purchase the product before; and
- Any other supporting documentation, not to exceed 25 pages.
Separate exclusion requests may be filed for each 10-digit HTS item at any time. Each request will be placed on the public record. There is no deadline for filing and applications will be considered on a rolling basis.
An exclusion will only be granted if:
- an article is not produced in the United States in a sufficient and reasonably available amount;
- is not produced in the United States in a satisfactory quality; or
- meets a specific national security consideration.
The rule also elaborates that the criteria above are “primarily focused on the availability of the product in the United States.” Objections by other parties to any exclusion request can be filed under separate procedures and will be weighed by Commerce in its review. Commerce will consider information about supply in other countries to the extent relevant to determining whether specific national security considerations warrant an exclusion.
Commerce Determination and Timing
Commerce will “normally” issue its determination on each request within 90 days of the application. Any approved exclusion will only apply to the individual or organization that submitted the specific exclusion request. Approved exclusions will take effect five business days after publication and effective for one year.
Exclusion Requests for Products Already Reviewed by Commerce
Other individuals or organizations not covered by a previously reviewed exclusion can request exclusion for that same product, but Commerce will take its prior determination into account. Requestors who want to ensure that the exclusion arguments have been optimally presented to avoid unhelpful prior determinations will want to file early.
For additional information on the exclusion process, we invite you to review the Federal Register notice.