Implementation of Section 232 Tariffs on Steel and Aluminum Derivative Articles
As of March 11, 2025, the U.S. government has enforced Section 232 tariffs on certain derivative articles of steel and aluminum, expanding the scope of duties beyond primary metal imports. These measures aim to protect national security interests by mitigating circumvention risks associated with modified steel and aluminum products.
Understanding Derivative Articles and Their Impact
Derivative articles refer to goods that incorporate steel or aluminum as a primary component and have undergone limited processing or modification to evade direct tariff application. Common examples include:
- Steel nails, tacks, and fasteners
- Aluminum stranded wire, cables, and conductors
- Certain types of tubing, piping, and mechanical components
The extension of tariffs to these products ensures that manufacturers and importers cannot sidestep Section 232 duties by making minor modifications to raw materials.
Compliance Challenges for Importers
The expansion of Section 232 tariffs presents challenges for importers, particularly in properly declaring derivative value for customs entry. Many derivative articles involve multi-component goods, where steel and aluminum may account for only a portion of the overall product value.
Customs valuation for these products must align with reasonable allocation of dutiable value while ensuring compliance with CBP regulations. Failure to declare accurate values may result in penalties, audits, or import delays.
Reconciliation Entry as a Temporary Reporting Mechanism
To address the complexity of derivative value reporting, importers may consider using reconciliation entry as a temporary solution. The CBP Reconciliation Program allows importers to file estimated values at the time of entry and later submit a final value adjustment. This approach provides:
- Flexibility in determining the steel/aluminum proportion of a derivative article
- Compliance assurance while adjusting declared values post-import
- Reduced risk of penalties due to inadvertent undervaluation
Steps for Importers to Implement Reconciliation
- Flag Entries for Reconciliation – When filing an entry, importers should flag it for value reconciliation in ACE (Automated Commercial Environment).
- Estimate Dutiable Value – Report a preliminary steel/aluminum content value, subject to later verification.
- Monitor Adjustments – Gather supporting data post-import to determine accurate derivative value.
- File the Reconciliation Entry – Submit the final reconciled value within the allowed CBP timeframe to adjust Section 232 tariff obligations accordingly.
Looking Ahead
With the Section 232 tariff enforcement on derivative articles now in effect, importers should ensure proper classification of derivative articles, assess their supply chains, and utilize reconciliation entry as a strategic compliance tool.
Future regulatory developments may further refine the valuation process, but in the interim, proactive planning will help mitigate risk and ensure uninterrupted trade operations.
For more guidance on Section 232 tariff compliance and reconciliation strategies, reach out to Future Forwarding today.