On July 10, 2024, United States President Joseph R. Biden issued two separate proclamations that narrow the exclusions from tariffs imposed under Section 232 of the Trade Expansion Act of 1962 ("Section 232") for certain steel and aluminum articles imported from Mexico. The Biden Administration implemented these measures in coordination with the outgoing administration of Mexican President Andrés Manuel López Obrador, which recently imposed measures requiring Mexican importers to provide more information to the Mexican government about the country of origin of imported steel products. While the proclamations take immediate effect, Customs and Border Protection ("CBP") has not yet provided the Harmonized Tariff Schedule of the United States ("HTSUS") classifications that will need to be declared for products that no longer qualify for the tariff exclusions.
Overview of the Proclamations
The two proclamations issued on July 10 impose different requirements for imports of steel and aluminum based on the countries in which the steel was melted and poured or the aluminum was smelted or cast:
Section 232 Proclamation on Steel Imports from Mexico ("Steel Proclamation"):
The Steel Proclamation establishes a "melt and pour requirement" for imports of steel articles and derivative steel articles from Mexico. Under this requirement, the Proclamation imposes Section 232 duties on all steel imports from Mexico that are melted and poured in a country other than Mexico, Canada, or the United States.
The Steel Proclamation reinstates the 25 percent ad valorem tariff imposed in Presidential Proclamation 9705 of March 8, 2018 ("Adjusting Imports of Steel into the United States") to all steel imports from Mexico that are melted and poured in a country other than Mexico, Canada, or the United States.
To be eligible for duty free treatment under the Steel Proclamation, importers of steel articles from Mexico must provide CBP "the information necessary to identify the countries" where the steel used to manufacture steel articles or derivatives were melted and poured (e.g., a certificate of analysis). Details on information required in the certificate of analysis are forthcoming from CBP.
Section 232 Proclamation on Aluminum Imports from Mexico ("Aluminum Proclamation"):
The Aluminum Proclamation establishes a "country of smelt and country of most recent cast requirement" for imports of aluminum articles and derivative aluminum articles from Mexico. Under this requirement, the Proclamation imposes Section 232 duties on all aluminum imports from Mexico that include primary aluminum in which the primary country of smelt, secondary country of smelt, or country of most recent cast is China, Russia, Belarus, or Iran.1
The Aluminum Proclamation reinstates the 10 percent ad valorem tariff imposed in Presidential Proclamation 9704 of March 8, 2018 ("Adjusting Imports of Aluminum into the United States") to aluminum imports from Mexico in which the primary country of smelt, secondary country of smelt, or country of most recent cast is China, Belarus, or Iran. Further, Presidential Proclamation 10522 of February 24, 2023 ("Adjusting Aluminum Imports into the United States"), which imposed a 200 percent ad valorem tariff on imports of aluminum articles where any amount of primary aluminum used in the manufacture of the aluminum articles is smelted in Russia, the aluminum articles are cast in Russia, or the derivative articles are cast in Russia, continues to apply to imports of aluminum articles from Mexico.
To be eligible for duty free treatment under the Aluminum Proclamation, aluminum articles imported from Mexico must be accompanied by a certificate of analysis that establishes that the primary country of smelt, secondary country of smelt, or country of most recent cast of the primary aluminum used in the product is not China, Russia, Belarus, or Iran. Details on information required in the certificate of analysis are forthcoming from CBP.
Implementation
The requirements of both Proclamations are effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on July 10, 2024, with corresponding tariff changes to be included in Chapter 99 of the HTSUS. CBP is instructed to impose the melt and pour requirements (for steel imports from Mexico) and the country of smelt and country of most recent cast requirement (for aluminum imports from Mexico) "as soon as practicable."
Imports of steel and aluminum from Mexico are not currently required to be accompanied by certificates of analysis demonstrating the countries in which the articles were melted and poured (in the case of steel) or smelted and cast (in the case of aluminum). CBP will provide additional information at a later date regarding the content of the certificates of analysis. US importers of steel and aluminum are already required to obtain import licenses and are required to make statements regarding the country of melt and pour (in the case of steel)2 and country of smelt and cast (in the case of aluminum)3 in order to obtain such licenses. The certificates of analysis required for purposes of the Proclamations may require additional information to support the conclusions US steel and aluminum importers already are making when obtaining import licenses.
Coordinated Mexican Actions
The Mexican government has implemented two measures in recent months in an attempt to prevent the evasion of duties on aluminum and steel goods imported to Mexico.
The first measure (see White & Case publication), published on April 15, 2024, added 72 new tariff lines for steel products (including steel ingot, rolled steel products, and hollow drilling bars) that require Automatic Import Notices. These notices must specify information regarding the country in which the article was melted and poured and in which the article was substantially transformed. The notices must match the details declared in the mill or quality certificates and provide the name of the mill, which must be registered with the Ministry of Economy.
The Mexican government also imposed two tariff increases within the last year (see White & Case publication) on various steel and aluminum products. These increases apply to countries with which Mexico does not have free trade agreements (among others, those mentioned in the Proclamation: China, Russia, Belarus, or Iran).
1 "Primary country of smelt" is defined in the Aluminum Proclamation as the country where the largest volume of new aluminum metal is produced from alumina (or aluminum oxide) by the electrolytic Hall-Héroult process. "Secondary country of smelt" is defined as the country where the second largest volume of new aluminum metal is produced from alumina (or aluminum oxide) by the electrolytic Hall-Héroult process. "Country of most recent cast" refers to the country where the aluminum (with or without alloying elements) was last liquified by heat and cast into a solid state.
2 Pursuant to 19 CFR § 360.101, all imports of steel must be accompanied by an import license. Although an importer must provide information regarding the country where the steel used in the manufacture of the product was melted and poured to obtain such an import license, the importer must provide the import license, and not a certificate of analysis, at the time of import. See 19 CFR §§ 360.101, 360.103. Pursuant to 19 CFR § 141.89(a), US importers of steel from Mexico are also required to present a mill analysis or mill certificate showing the percentages by weight of carbon and any metallic elements contained in the articles at the time of import.
3 Pursuant to 19 CFR § 361.101, all imports of aluminum must be accompanied by an import license. Although an importer must provide country of smelt and cast information to obtain such an import license, the importer must provide the import license, and not a certificate of analysis, at the time of import. See 19 CFR §§ 361.101, 361.103.
