Second steel derivatives S232 inclusion window opens, business community voices concern

Sept. 15 through Sept. 29, applicants can email requests for inclusions to the Defense Industrial Base Programs. 

The first two-week application window opened in May. A public comment period followed. Together, they led to over 400 HTS codes being added to the list of steel and aluminum derivative products covered by Section 232 tariffs.  

Business reactions

On Sept. 16, the US Chamber of Commerce penned a multi-association letter highlighting issues within the Commerce Department’s new Section 232 steel and aluminum “Inclusions Process.” 

The organization, which advocates for the growth of US businesses, stated that the new inclusion process is imposing “significant compliance burdens for businesses of all sizes, including those that do not produce steel and aluminum products.” 

Specifically, the Chamber cited that determining the types of tariffs for specific goods, which importers are responsible for reporting the data and value calculations, interpreting melt-and-pour data or smelted and cast, is too complex for businesses of all sizes.  

One West Coast OEM source said he supports the Chamber of Commerce letter. He stated the new derivatives inclusion process will likely force him to consult a trade lawyer. It could also cut into his small margin by requiring extra spending on declarations

“This is counterintuitive. I want to run my business and this cost of doing business is too high,” the OEM source said. “It’s already hard enough to navigate regulations, but now I have more red tape.”

The Chamber’s letter noted, “Any misstep or delay in reporting risks the imposition of a 50% tariff on the value of the entire product. For aluminum, the inability to trace sourcing results in a 200% tariff on the value of the entire product.” 

Besides the US Chamber of Commerce, organizations such as the Aluminum Association and the National Association of Manufacturers (NAM) are voicing concerns about the outcomes of including steel derivatives in the S232 duties. NAM is proposing a ‘manufacturing tariff speed pass‘ to mitigate the administrative load.

Background

The Bureau of Industry and Security (BIS) established the ‘inclusions process‘ in an interim final ruling to satisfy a presidential mandate.

On Feb. 10, President Trump issued two proclamations. Proclamation 10895 covers aluminum imports. Proclamation 10896 covers steel imports. Both impose specific duty rates on aluminum, steel, and certain derivative articles. The proclamations direct the Secretary of Commerce to create a process for adding the articles to the duties.

Organizations including the American Iron and Steel Institute and Steel Manufacturers Association celebrated the new inclusion of derivatives in Section 232 measures.