In a surprise announcement after hours on Friday January 24, 2020, the White House announced that it plans to impose an additional 25 percent tariff on some steel articles and 10 percent on some aluminum articles starting February 8, 2020 under Section 232 of the Trade Expansion Act of 1962. A proclamation issued by the White House indicated that these new tariffs are being imposed due to the fact that there has been a surge in imports in certain derivative articles of steel and aluminum, and because domestic capacity has not risen as originally expected following imposition of the initial steel and aluminum tariffs in March 2018.

The additional tariffs on steel derivatives will apply to goods from all countries except for Argentina, Australia, Brazil, Canada, Mexico, and South Korea. The additional tariffs on aluminum derivatives will apply to goods from all countries except Argentina, Australia, Canada, and Mexico.

According to the summary provided in the announcement, several products have had a history of increased imports with some products surging beyond the average four percent increase across all products. According to the announcement, the increase is the result of an assessment by Commerce Secretary Wilbur Ross that “foreign producers of these derivative articles have increased shipments of such articles to the United States to circumvent the duties on aluminum articles and steel articles.” The products affected by these additional tariffs are currently either at a zero percent tariff rate or have low tariff rates. The metals also have to account for at least two-thirds of the product’s cost, according to the proclamation. Some examples of targeted products include steel nails, tacks and corrugated nails and aluminum automobile stampings, aluminum wire and cables. At the time of this post’s publication, the Annexes to the proclamation containing the full list of affected goods are yet to be released by the White House. This post will be updated once those Annexes have been published online.

It is important to note that articles imported will retain “privileged foreign status” even when imported into a foreign trade zone and that these duties are not eligible for duty drawback upon re-export.