Steel and aluminum spared in new Section 301 forced-labor tariffs

The office of the US Trade Representative (USTR) released its findings surrounding two Section 301 investigations involving a host of economies’ actions on forced labor and Brazil’s policies.

The big takeaway for steel and aluminum? The metals are excluded from the additional Section 301 tariffs, as they are already subject to Section 232 duties. The forced-labor and Brazil 301 actions are aimed more at finished goods supply chains, not raw metals.

This could set a precedent for other Section 301 investigations. However, in the Section 301 metals-critical investigation into excess capacity in manufacturing, the Trump administration could about-face and choose to stack the tariffs. It’s a game of wait-and-see.

Forced labor action

USTR concluded that 60 economies have either failed to impose or failed to effectively enforce a prohibition on the importation of goods made with forced labor. The determination calls their practices “unreasonable” and burdensome to US commerce under Section 301. As the document states, the failure of these economies “permits firms that avail themselves of forced labor to produce goods at lower cost and thereby distort market conditions.”

In response, USTR is proposing new ad valorem duties of 10% or 12.5% on all products from the listed economies, with certain exclusions.

According to the exclusions in Annex A, the proposed Section 301 forced-labor tariffs do not apply to any products already covered by Section 232, effectively excluding steel and aluminum mill articles from the new duties.

Downstream goods that contain steel and aluminum but are not classified as steel or aluminum articles could still fall under the new 301 rates. USTR is accepting written comments on the proposal through July 6, with hearings scheduled for July 7.

Action on Brazil

USTR’s sweeping Section 301 determination against Brazil found that a wide range of Brazilian policies are “unreasonable” and burdensome to US commerce.

While the proposed response includes new tariffs on Brazilian goods, steel and aluminum products remain exempt from these tariffs because they are already covered by Section 232. The Brazil case, like the forced-labor 301 action, targets finished goods and upstream policy distortions, not raw metals.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held various editorial positions with steel industry publications, associations, and mills since 2007. She joined the SMU team in 2022. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania.