aluminum bars

FTZs Can Help Avoid Tariffs on Steel and Aluminum ‘Derivative’ Products

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Effective June 1, 2018, additional tariffs of 25 percent and 10 percent on steel and aluminum imports were imposed for almost all countries. Effective February 8, 2020, these tariffs also applied to certain derivatives of aluminum and steel articles.

ITC-Diligence Inc. can assist companies with avoiding or postponing tariffs by utilizing Foreign Trade Zones (FTZ). In May 2019, presidential proclamations amended Proclamation 9704 and Proclamation 9705 with regards to the Section 232 additional duty for steel and aluminum articles from Canada and Mexico. Canadian and Mexican steel and aluminum articles can now be entered for consumption from an FTZ without a Section 232 duty.

By March 11, 2020, the U.S. Customs and Border Protection released Section 232 Active Steel and Aluminum Product Exclusions guidance. The U.S. Department of Commerce approved Section 232 exclusion requests in accordance with Presidential Proclamations 9704 and 9705 (See 83 FR 12106) and posted the approved exclusions online.

As of April 5, 2021, the U.S. Court of International Trade issued an opinion declaring the Section 232 steel and aluminum “derivative” tariffs unlawful and ordered the government to refund any duties to the plaintiff. Prime Source Building Products v. United States, Slip Op. 21-36.

Should this ruling go through, it could mean that companies could recover derivative tariffs paid, plus interest. ITC-Diligence Inc. can also assist companies looking to recover tariffs.

The global impact of relaxing or reversing Section 232 measures could mean that low-priced, high carbon-polluting producers overseas could have an advantage. A better solution for the environment and the U.S. economy would be to utilize FTZs and apply for exclusions of tariffs.

What products fall under Section 232 tariffs on steel and aluminum?

Common products that fall under Section 232 tariffs on steel and aluminum include canned goods, soda cans, auto parts, tools, machines, furniture frames and other products consisting of aluminum and steel components. An extensive list is provided below:

• Steel articles classified under HTSUS subheadings 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90, including any subsequent revisions to these HTSUS classifications

• The following aluminum articles: (a) unwrought aluminum (heading 7601); (b) aluminum bars, rods, and profiles (heading 7604); (c) aluminum wire (heading 7605); (d) aluminum plate, sheet, strip, and foil (flat rolled products) (headings 7606 and 7607); (e) aluminum tubes and pipes and tube and pipe fitting (headings 7608 and 7609); and (f) aluminum castings and forgings (HTSUS 7616.99.5160 and 7616.99.5170), including any subsequent revisions to these HTSUS classifications

•The derivatives of aluminum articles and steel articles described in Annex I and Annex II

ITC-Diligence Inc. is an international trade and foreign trade zone consultant, national corporate Customs Agency and one of the largest independent General-Purpose Zone Operator of Foreign Trade Zones in Southern California. ITC-Diligence Inc. provides a unique blend of international trade related services to importers, exporters, manufacturers, distributors, and local government, focusing on Customs & Border Protection issues and a niche Foreign Trade Zone business.

Our FTZ consultants provide trade related services to importers, exporters, manufactures, distributors, and local government, focusing on Customs & Border Protection issues and Foreign Trade Zones business.

Contact Us today to see how ITC can help.