On January 24, 2020, President Donald Trump issued a Presidential Proclamation directing the Department of Commerce to adjust the tariff rate on imports of derivative steel and aluminum products into the United States. In earlier proclamations (see Trump and Trade Update of March 8, 2018), the president directed Secretary of Commerce Wilbur Ross to monitor imports of aluminum articles and steel articles and to inform the White House of any circumstances that might indicate the need for further action under the provisions of Section 232 of the Trade Expansion Act of 1962. In this proclamation, President Trump states that Secretary Ross “has informed me that domestic steel producers’ capacity utilization has not stabilized for an extended period of time at or above the 80 percent capacity utilization level identified … as necessary to remove the threatened impairment of the national security.” While imports of steel and aluminum articles have declined since the imposition of the tariffs and quotas, the proclamation states, imports of certain derivatives of steel and aluminum have significantly increased, essentially circumventing the existing Section 232 tariffs on primary steel and aluminum products and eroding “the customer base for U.S. producers of aluminum and steel and undermin[ing] the purpose of the proclamations adjusting imports of aluminum and steel articles to remove the threatened impairment of the national security.”

As a result, President Trump has announced that he will adjust the Section 232 steel and aluminum tariffs to also apply to certain derivatives of these articles. Beginning on February 8, 2020, all imports of identified derivative aluminum articles will be subject to an additional 10 percent duty rate (excluding imports from Argentina, Australia, Canada and Mexico) and all imports of identified derivative steel articles will be subject to an additional 25 percent duty rate (excluding imports from Argentina, Australia, Brazil, Canada, Mexico and South Korea).

The annex for derivative aluminum products subject to these new Section 232 tariffs lists six Harmonized Tariff System (HTS) subheadings covering certain stranded wire, cables, plaited bands and the like, including slings and similar articles, not electrically insulated, as well as certain automobile bumper stampings and body stampings for tractors for agricultural use. The annex for derivative steel products includes four HTS subheadings covering certain nails, tacks, drawing pins, corrugated nails and staples, as well as certain automobile bumper stampings and body stampings for tractors for agricultural use. As with the original Section 232 tariffs on certain steel and aluminum articles, the Department of Commerce (via the Bureau of Industry and Security (BIS)) may, upon authorization by Secretary Ross, authorize exclusions from these additional tariffs.