During President Donald Trump’s first term in 2018, he instituted tariffs on steel and aluminum at rates of 8 and 10% pursuant to Section 232 of the Trade Expansion Act of 1962 (Section 232), with certain country-specific and product-specific exemptions. These tariffs were continued under the Biden administration.
On Feb. 10, President Trump signed new orders — again pursuant to Section 232 — increasing tariffs on steel and aluminum imports across the board to 25%. Calling the prior exemptions “loopholes,” the orders also revoke all prior country-specific agreements and quotas and eliminate all previously available exemptions. Further reciprocal tariffs may be announced as soon as Feb. 13.
Here is what you need to know.
Tariff Increases: Tariffs will increase at 12:01 a.m. ET on March 12, 2025 (absent some change between now and then), to 25% on all steel and aluminum imports.
Tariff Expansion: The U.S. Department of Commerce has been ordered to develop a process in the next 90 days for bringing additional “derivative” products within the scope of the Section 232 tariffs. The order allows certain affected sectors the opportunity for comment. “Derivative” products are not yet defined but will eventually be published in the Federal Register.
No More Exemptions — For Now: Previously, companies affected by tariffs were able to apply for exemptions at the product or company level. Many such exemptions were granted, saving those companies from tariffs. Likewise, deals were made with certain countries for tariff quotas or exempting a country from the tariffs entirely. Effective at 12:01 a.m. ET on March 12, 2025, however, all such exemptions and agreements will terminate, and the increased Section 232 tariffs will apply across the board without exception. Accordingly, all companies using imported steel or aluminum will be subject to the 25% tariffs. Nevertheless, in his press conference announcing the tariffs, President Trump did not foreclose the possibility that countries could make deals to lessen the impact of tariffs on their imports.
Classifications: Up to this point, classification has been an important means of ensuring that products are not subject to tariffs if they can be classified in a manner to be excluded. However, U.S. Customs and Border Protection has now been ordered to review classifications to ensure these new tariffs are not avoided through misclassifications. Any misclassification will be subject to the highest fines available.
Take Action Now: These tariffs are scheduled to go into effect in less than a month. Now is the time to take action and better understand how you may be affected. It’s important to identify what options you have in your supply chain and with your supply chain contracts to avoid or mitigate the costs of these tariffs when they are imposed.
