Author: BCB International

The Department of Commerce has posted revised HTS lists for steel and aluminum, including some derivatives, to which 25% duty will be applicable effective March 12, 2025 at 12:01 am. The applicable notice pertaining to steel can be found HERE. Aluminum can be found HERE. As previously advised, Canada and Mexico will no longer be exempt from these Section 232 duties as things stand now REGARDLESS of whether or not the product qualifies for USMCA duty free treatment.  Section 232 duties are separate. It is imperative that you review the above links in full and determine if your products will be subject. Anything subject to these orders that crosses the border after March 12 at 12:01 am will be charged duty at the rate of 25%.

Further, and as stated in the previous Notices and Executive Order, the tariffs will ultimately be applicable to additional steel and aluminum derivatives classified outside of chapters 73 and 76, but the duty will only be charged on the steel or aluminum content. There will be an exemption for derivatives in instances where the steel or aluminum used to product the derivative was melted and poured in the United States.

Duties will not be effective on the aforementioned additional derivatives until “public notification of the Secretary of Commerce” that systems are in place to process and collect these tariffs.

The President has signed an Executive Order exempting products of Canada that qualify for duty free treatment pursuant to the terms of the USMCA agreement EFFECTIVE MARCH 7, 2025 at 12:01 am.

**Notably, the effective date of the exemption is March 7, 2025 at 12:01 am. Accordingly, and unfortunately, any shipments that have crossed the border between March 4, 2025 at 12:01 am and the aforementioned effective date, will still be subject to the tariffs and the same will be owed to U.S. Customs. If you have shipments pending that have not yet crossed the border, and you are claiming USMCA treatment on those shipments, the shipments will be subject to duty if they cross the border this evening and prior to 12:01 am tomorrow, March 7, 2025.**

The Executive Order states as follows: 

“(a) Articles that are entered free of duty as a good of Canada under the terms of general note 11 to the Harmonized Tariff Schedule of the United States (HTSUS), including any treatment set forth in subchapter XXIII of chapter 98 and subchapter XXII of chapter 99 of the HTSUS, as related to the Agreement between the United States of America, United Mexican States, and Canada, shall not be subject to the additional ad valorem rate of duty described in section 2(a) or section 2(b) of Executive Order 14193.

(b) The additional rate of duty on potash that is not subject to subsection (a) of this section shall be reduced to 10 percent in lieu of 25 percent. 

(c) The modifications set out in this section shall be effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on March 7, 2025.”

 General Note 11 referenced above contains the applicable “rules of origin” under the USMCA agreement for determining whether your good qualifies for preferential treatment.

 In summary, if you claim USMCA duty free treatment on products of Canada, your entries will not be subject to the 25% duty. If you ship goods for which you do not claim USMCA treatment, your entries will still be subject to the 25% duty.

CBP has issued official CSMS messages advising the threatened tariffs on Canada and Mexico take effective March 4, 2025 at 12:01 am.  All products of Canada and Mexico, as the same are defined in each respective notice, will be subject to an additional tariff rate of 25% with few exceptions.  Note certain energy and energy resources will be subject to a lower rate of 10%.

As it pertains to the applicable rules of origin, the rules are the same as in the prior directives. Specifically, whether a good is a product of Canada or Mexico is determined based upon the application of EITHER 19 CFR 102 or the “substantial transformation” transformation test. If a good is a product of Canada or Mexico based on the application of either rule, then the good is subject to the 25% duty with very few exceptions (e.g. donations, informational materials, energy resources defined above)

Also, note this time around de minimis treatment is still available, at least temporarily, for shipments valued under $800.00 USD.  However, duty drawback remains unavailable as it pertains to these additional tariffs.

Finally, the president has signed an Executive Order revising the previous order from last month by increasing the duty rate on Chinese goods by 10%.  Accordingly, most Chinese goods are now subject to additional duty of 20%.  All other applicable duties continue to apply.  The Executive Order is unclear as to an effective date, but all should operate under the assumption the effective date is the same as that for Canada and Mexico until clarification is provided.

The Annexes to the Presidential Proclamations pertaining to the Steel and Aluminum tariffs, which contain the lists of additional HTS numbers for steel and aluminum derivatives which will be subject to additional duty, have been officially published in the Federal Register.

The list of additional aluminum derivative articles can be found here: Additional Aluminum Derivatives . The Annex can be found at the end of the publication.

The list of additional steel derivative articles can be found here: Additional Steel Derivatives .

The Annex can be found at the end of the publication.

As it pertains to the aluminum derivatives listed in the corresponding Annex, for any article NOT classified in chapter 76 of the HTSUS, the additional duty shall be effective “upon public notification by the Secretary of Commerce that adequate systems are in place to fully, efficiently, and expediently process and collect tariff revenue” for those articles. However, for such articles, the duty shall only be charged on the aluminum content of the derivative article. We have no further information as to the effective date of this clause of the proclamation.

For any article that IS classified in chapter 76 in the aforementioned Annex, it would appear based upon the text of the proclamation, that the duty will be effective as of March 12, 2025 at 12:01 am. However, we await further clarification on this.

In any event, it is important to note that the duty “shall not apply to derivative aluminum articles processed in another country from aluminum articles that were smelted and cast in the United States.” Further, all imports of derivative aluminum articles specified in Annex I that are a product of Russia or where any amount of primary aluminum used in manufacturing the article is smelted in Russia, are subject to a duty rate of 200%.

As it pertains to the steel derivatives listed in Annex I to that proclamation, for any derivative steel article identified in the Annex that is not classified in chapter 73 of the HTSUS, the additional duty shall only apply to the steel content of the article. Similar to aluminum, if the derivative steel article is processed in another country from steel that was melted and poured in the United States, the derivative article is exempt from the additional duty.

Based upon the text of the steel proclamation, it appears that the duty on the additional steel derivative articles specified in the corresponding Annex will be effective “upon public notification by the Secretary of Commerce, that adequate systems are in place to fully, efficiently, and expediently process and collect tariff revenue for covered articles” whether or not the derivative article is classified in chapter 73. In other words, it appears there is a slight different between the aluminum and steel proclamations in this respect.

Again, we have no further information or insight as to when “public notification by the Secretary of Commerce” will occur as it pertains to aluminum derivative articles not classified in chapter 76, or all steel derivative articles specified in the Annex. We will advise once we do.

As expected, the President of the United States has officially signed the Executive Order modifying existing orders pertaining to tariffs on aluminum and aluminum derivative products (Note: the Order title references steel but the content pertains to aluminum). Most notably, the Order increases the amount of duty charged on aluminum and aluminum derivative products pursuant to prior orders from 10% to 25% effective March 12, 2025 at 12:01 am.

 Similar to the steel order, any prior exemptions, exclusions, country-specific quota benefits, etc. will be terminated as of the above effective date. Accordingly, all aluminum and aluminum derivative products which are currently subject to 10% Section 232 duties pursuant to prior presidential orders, and as subsequently revised, will be subject to an increased duty of 25% regardless of country of origin. This includes Canada and Mexico. However, for aluminum articles that are a product of Russia, and aluminum derivative products where any amount of primary aluminum used in the manufacture of the article is smelted in Russia, or the derivative aluminum article is cast in Russia, the duty rate will be 200%.

Further, and also similar to the steel order, the Order states there will be tariffs on ADDITIONAL aluminum derivative articles, but the list of those products has not yet been released. The Order references an Annex where these products will be found but the same has not been issued. Ultimately, it appears that the duty will only be charged on the “aluminum content” and the Secretary of Commerce will advise the president when they are equipped to handle this. A Federal Register Notice will be issued at that time. Again, the list of those additional products is not yet available, nor do we have any additional information as to what that list will look like.

 Additionally, the Order explicitly exempts from duty aluminum derivative articles (to be listed in the not yet published “Annex”) processed in another country from aluminum articles that were smelted and cast in the United States. Note the Executive Order pertaining to steel and steel derivatives, which was previously circulated, allows for a similar exemption for steel derivative articles made in another country from steel that was melted and poured in the United States.

 Links to applicable presidential orders which list the products subject to the latest Order are embedded above for your reference.

The President of the United States has signed an Executive Order modifying existing orders pertaining to tariffs on steel and steel derivative products. Very basically, effective March 12, 2025 at 12:01 am, any prior exemptions, exclusions, country-specific quota benefits, etc. will be terminated. Accordingly, all steel and steel derivative products which are currently subject to 25% Section 232 duties pursuant to prior presidential orders, and as subsequently revised, will be subject to those duties regardless of country of origin. This includes Canada and Mexico.

Links to applicable presidential orders are embedded above for your reference.

Further, the Order states there will be tariffs on ADDITIONAL steel derivative articles but the list of those products has not yet been released. The Order references an Annex where these products will be found but the same has not been issued. Ultimately, it appears that the duty will only be charged on the “steel content” and CBP will advise the president when they are equipped to handle this. A Federal Register Notice will be issued at that time.

The additional 10% tariffs on products of China AND Hong Kong, are now in effect as of 12:01 am EST today, February 4, 2025. In other words, any shipment with a CBP release date of February 4, 2025 or later will be subject to the new tariffs until further notice.

These new tariffs are IN ADDITION to all other applicable tariffs, including but not limited to the current 25% duty applicable to many Chinese products, and any applicable AD/CVD. Per CBP CSMS message 63988468, and the corresponding Federal Register Notice, no duty drawback is available, nor are shipments of subject products eligible for “de minimis” clearance pursuant to 19 U.S.C. 1321 (“Section 321”). A formal or informal (if eligible) entry is required.

Further, there are very limited exceptions to the new tariffs. It should be noted that pursuant to the Executive Order, the following situation does allow for an exemption: Except for products described in headings 9903.01.21 and 9903.01.22, and other than products for personal use included in accompanied baggage of persons arriving in the United States, articles the product of China and Hong Kong that: (1) were loaded onto a vessel at the port of loading, or in transit on the final mode of transport prior to entry into the United States, before 12:01 a.m. eastern standard time on February 1, 2025; and (2) are entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern standard time on February 4, 2025, and before 12:01 a.m. eastern standard time on March 7, 2025.

Per U.S. Customs and Border protection, and multiple new outlets, the United States and Canada have reached an agreement pausing tariffs on both sides for at least 30 days.  CBP has issued an official CSMS message retracting its prior message regarding implementation of the tariffs.  The content of that message is pasted below.

CSMS # 63991510 – GUIDANCE: Pause on Application of Additional Duties on Imports from Canada

Per the President’s direction, CSMS message 63988467 is retracted with respect to imports from Canada. CBP will not apply the additional duties outlined in the President’s Executive Order titled Imposing Duties to Address the Flow of Illicit Drugs Across our Northern Border, dated February 1, 2025, at this time.

Related message: 63988467

Multiple news outlets are reporting that President Trump has reached an agreement with Mexico to delay the tariffs imposed on products of Mexico for one month.  We continue to monitor the situation with Canada and China closely. We will provide further updates as the same become available.

As noted on Saturday (Canada’s Response to the 25% US Tariff on Most Canadian Goods | CSCB National Office), Canada has implemented a suite of measures to respond to the 25% tariff imposed by the United States on most Canadian goods. Since the initial announcement, the following additional information has become available:

United States Surtax Order

List of products from the United States subject to 25 per cent tariffs effective February 4, 2025 – Canada.ca

Customs Notice 25-03: United States Surtax Order (2025)

BCB Canada will continue to provide update as the same become available.