Section 232 Tariffs
Section 232 tariffs are additional duties on steel and aluminum imports, imposed by the President under Section 232 of the Trade Expansion Act of 1962 on the basis that those imports threaten national security. The base rates are 25% on steel articles and 10% on aluminum articles, with country-specific exemptions and a product exclusion process administered by the Department of Commerce.
In Detail
Presidential Proclamations imposing Section 232 tariffs on steel and aluminum took effect in March 2018. The authority comes from a Commerce Department investigation finding that domestic steel and aluminum production was insufficient to meet national defense requirements — a finding that triggers the President's authority under Section 232 to "adjust imports" as necessary to address the national security threat. The tariffs apply to "steel articles" and "aluminum articles" as defined in the Proclamations, identified by specific HTS subheadings in Chapters 72–73 (steel) and Chapter 76 (aluminum).
Country-specific treatment is a defining feature of Section 232. Certain trading partners negotiated quota arrangements with the United States — Canada and Mexico under USMCA, the EU, Japan, the UK, and others — receiving exemption from the tariff in exchange for volume limits on steel and aluminum exports to the United States. Goods from non-exempt countries pay the full tariff rate. Country of origin determines which treatment applies, making origin analysis essential to Section 232 determination for steel and aluminum products.
The Department of Commerce administers a separate product exclusion process for Section 232, distinct from the USTR exclusion process for Section 301. Importers can petition for exclusions for products unavailable domestically in sufficient quantity or quality. Granted exclusions are product- and company-specific, assigned to specific HTS subheadings and product descriptions, and limited in duration. Steel and aluminum derivative products — downstream products that incorporate significant steel or aluminum content — are also subject to Section 232 under supplemental Proclamations, expanding the scope well beyond raw steel and aluminum mill products.
Classification Significance
Section 232 applicability is HTS-code dependent. The Proclamations identify specific subheadings within Chapters 72–73 and 76 that constitute "steel articles" and "aluminum articles." A correct base HTS classification in one of these chapters is the prerequisite for determining Section 232 exposure. Country-of-origin analysis for the specific exporting country then determines the applicable rate or exemption. Steel and aluminum derivative products require a separate Section 232 analysis based on their own HTS codes.
How Kanon Handles This
Kanon evaluates Section 232 applicability as part of its Layer 2 Chapter 99 analysis for steel and aluminum product classifications. The base HTS code is checked against the applicable Proclamation scope, country-specific exemption status is flagged, and Commerce product exclusion codes are identified. All Section 232 findings are documented in the Classification Support Package.