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  Miller & Company P.C.
4929 Main Street
Kansas City, Missouri 64112
Phone: (816) 561-4999
Fax: (816) 561-5999
Web: www.millerco.com
 


STEEL/ALUMINUM ADDITIONAL TARIFFS

3/23 CURRENT CONSIDERATIONS

 


 

Late last night the White House issued two new Presidential Proclamations and a Briefings statement significantly changing the previous White House documentation that we provided to you on this subject.  Additionally, just before midnight, CBP Headquarters issued a CSMS message providing details for the Customs entry process.  Below are links to the White House documents.   The full text of CSMS message 18-000240 is included here.

 

General Imports

 

President Trump authorized the “suspension” of the additional 25%/10% tariffs for steel/aluminum from Canada, Mexico, the European Union (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom), South Korea, Australia, Argentina, and Brazil.  Also new is a short period for the “suspension” to only May 1, 2018.  The White House documents make it clear that full Customs duties will be imposed when the “suspension” expires, unless it has been extended by the White House.  The Proclamations indicate that the President retains authority to further modify tariffs, remove suspensions for countries, exclude on a long-term basis a particular country, suspend tariffs on countries not included in the original list, or impose quotas on imports from “suspension” countries.  The potential imposition of quotas (either absolute or tariff rate quotas like those imposed in January on washing machines and solar panels) would be based upon the total volume of imports since January 1, 2018.  The wide variety of potential changes to the steel/aluminum additional tariffs and the potential for quota imposition creates an entirely new framework of potential import management concerns and excessive duty rates.

 

VERIFICATION OF HTS CLASSIFICATONS

 

We strongly encourage clients to review their HTS list Item Master against the steel and aluminum Annexes, and also confirm that the HTSs currently being declared are correct.  This review should include steel and aluminum parts currently classified within the Proclamations and Annexes list and in “parts of” tariff classifications to ensure they are correctly classified as such.  CBP will be very carefully checking HTSs on Customs entries for accuracy.

 

Foreign-Trade Zone Management

 

The Presidential Proclamations provide direction on FTZs that was missing from the original Proclamations.  All merchandise subject to these new Customs duties of 25% on steel and 10% on aluminum must be placed in Privileged Foreign (PF) status upon admission to an FTZ.  This is the exact same language that was used in January for washing machines and solar panels and previously used in 2002 in a similar Presidential Proclamation for steel/aluminum products.

 

What is very different about the Proclamations is additional language concerning on-hand merchandise in zone status with Privileged Foreign status.  It directs application of the additional duties (retroactively) to all such PF merchandise.  To the best of our knowledge, no Presidential Proclamation previously has ever indicated that merchandise that was on hand in Foreign-Trade Zones in PF Status at the time of the imposition of additional duties would be subject to those additional duties on the date that Customs entry is made. This language in the Presidential Proclamations and CBP CSMS message negates the clear terms of the Foreign-Trade Zones Act §81c that indicates that when PF status is secured the entry is liquidated at the rate of duties in effect on the date the Privilege is requested.  Further, the CBP ACE computer system requires a date to be placed by line item so as to validate when PF status is filed on the CBPF e-214 at admission or subsequent election while in the zone prior to any manipulation or manufacture.   Numerous historical CBP Headquarters Rulings support our legal analysis of this question.

 

Any clients with steel or aluminum products in PF status as of the effective time and date of the Proclamations (12:01 am today, March 23) should contact us immediately.

 

exclusion process

 

As we previously noted this week, there is an exclusion process that is provided for in the Federal Register published Monday.  Given the very unusual nature of the circumstances with respect to “suspension,” and the variety of potential changes explained herein, we advise all clients affected to immediately seek exclusions for their product.  We have several clients that have already authorized us to immediately proceed with the exclusions process in light of these Presidential Proclamations and CSMS message.  

 

Please contact Marshall Miller, Sean Murray, or Brian Murphy with any questions.

 

https://www.whitehouse.gov/presidential-actions/presidential-proclamation-adjusting-imports-steel-united-states-2/

 

https://www.whitehouse.gov/presidential-actions/presidential-proclamation-adjusting-imports-aluminum-united-states-2/

 

https://www.whitehouse.gov/briefings-statements/president-trump-approves-section-232-tariff-modifications/

 

 

About Our Firm

Miller & Company is a law firm serving a diverse clientele in import, export, and foreign-trade zone law. Within these areas of specialized practice, we have received global recognition for our involvement in the development of the U.S. Foreign-Trade Zones Program.

Disclaimer: This communication is provided by Miller & Company P.C. and intended for educational and informational purposes only and does not constitute the rendering of legal counsel or other professional services. Before you act on any information provided in this newsletter, you should seek professional advice regarding its applicability to your specific circumstance.

To learn more about our firm, you can visit our website at www.millerco.com