August 29, 2018

Dear Valued Customer:

Product Exclusions to be Available From Section 232 Quota Countries

White House: Proclamations have been issued on August 29 expanding company-specific exclusions from Section 232 tariffs and quotas on steel and aluminum, which are summarized as follows:

• The proclamations make exclusions from Section 232 tariffs retroactive to the date the exclusion request was accepted, rather than the date of posting, by the Commerce Department.
• The proclamations also authorize Commerce to grant exclusions for products from countries constrained by Section 232 quotas on steel and aluminum (currently Argentina for steel and aluminum, and South Korea and Brazil for steel).
• Companies granted the quota exclusions would file under new Harmonized Tariff Schedule subheadings 9903.80.60 for steel and 9903.85.11 for aluminum.
• Excluded products would not be subject to the Section 232 tariffs.
• The proclamations direct Commerce to issue procedures for requests for the quota exclusions. Quota exclusions will take effect on the date requests are granted.
• A separate quota exemption process applies for steel ordered before the tariffs were announced March 8 that are meant for construction of facilities for which the quotas have held up construction. Several conditions apply, including that the steel can’t make up more than 10 percent of the facility cost. Steel entered under the new subheading for the facility exclusion, 9903.80.61, will be subject to a 25 percent duty. No equivalent exemption was created for aluminum.
• The steel and aluminum proclamations also each provide for CBP to adopt export certification requirements for goods subject to quota. Where a foreign government of a country eligible for quotas notifies the U.S. that it has established a mechanism for the certification of exports to the United States of products covered by the quantitative limitations applicable to these subheadings, and where such mechanism meets the operational requirements for participation in an export certification system administered by the United States, CBP may require filing of the certifications as a condition of entry following an announcement in the Federal Register.

A clause in each proclamation amends the initial proclamations implementing the Section 232 tariffs to specifically provide for an effective date for exclusions. Earlier proclamations implementing tariffs on steel and aluminum are amended so that, for entries on which liquidation is not final, the exclusion shall be retroactive to the date the request for relief was accepted by the Department of Commerce.

Thank you for your attention and cooperation. If you have any questions, please contact your nearest JJB representative.

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