Boston, MA – June 4, 2025 – CH Powell Company is issuing an urgent trade alert to all importers regarding significant changes to the Section 232 duties on imported steel and aluminum articles, effective today, June 4, 2025. These adjustments may have a substantial impact on your import costs and compliance requirements.
Key Changes Effective June 4, 2025:
-
- Tariff Rate Increase: The ad valorem tariff rate on most imported steel and aluminum articles, and their derivative products, has been increased from 25% to 50%. This higher rate is effective as of 12:01 a.m. Eastern Daylight Time on June 4, 2025.
- No In-Transit Exemption: There is no “in-transit” exemption for this increased tariff rate. Goods entered for consumption, or withdrawn from warehouse for consumption, on or after today will be subject to the new 50% duty.
- Reciprocal Tariffs on Non-Metal Content: A critical new development is the application of reciprocal tariffs. For articles subject to Section 232 duties, the 50% tariff will apply to the steel or aluminum content. Crucially, any applicable Reciprocal Tariff may now also apply to the balance of the non-metal content of the imported article. This marks a significant shift from previous policy where Section 232-tariffed goods were generally exempt from additional reciprocal duties on their non-metal components.
- Enhanced Compliance and Penalties: U.S. Customs and Border Protection (CBP) is expected to issue stringent guidance on declaration requirements for steel and aluminum content. Importers are warned of maximum penalties for noncompliance, including substantial monetary fines, potential suspension of import privileges, and even criminal charges for underreported declarations.
- Termination of Most Exemptions and Exclusions: As of March 12, 2025, most country-specific exemptions, quotas, and tariff-rate quotas (with a temporary exception for the UK) have been terminated. The product exclusion process was also halted on February 10, 2025, though previously granted, unexpired exclusions remain valid.
- Expanded Scope: The scope of Section 232 duties was expanded on March 12, 2025, to include a broader range of derivative steel and aluminum articles.
- No Duty Drawback: Importers should note that duty drawback remains unavailable for Section 232 duties.
Impact on Importers:
These changes will lead to a direct and significant increase in the landed cost of affected steel and aluminum imports. Importers must:
-
- Immediately recalculate landed costs to account for the 50% tariff and the potential application of reciprocal tariffs on non-metal content.
- Thoroughly review and validate HTS classifications for all open purchase orders, especially for articles containing steel or aluminum, to ensure accurate content breakdowns.
- Secure necessary documentation, such as melt-and-pour or smelt-and-cast certificates for eligible materials, to prevent clearance delays and ensure compliance.
- Re-evaluate supply chain strategies, considering the increased costs and potential for domestic sourcing where feasible.
- Prioritize strict adherence to CBP declaration requirements to mitigate the risk of severe penalties.
CH Powell Company is actively monitoring these developments and will provide further updates as more detailed guidance from CBP becomes available.
For further information or assistance, please contact your CH Powell Company team member.