As a U.S. Customs Broker, staying ahead of trade policy changes is crucial for guiding our clients and team through the evolving landscape of steel imports. On February 10, 2025, President signed Proclamation 10896, "Adjusting Imports of Steel into the United States," a significant policy shift under Section 232 of the Trade Expansion Act of 1962. This directive, detailed in Federal Register notices on February 18 and March 5, 2025, introduces sweeping changes effective March 12, 2025. Here’s what you need to know about the transition from February 10 to March 12 and its impact on steel imports.
What is Proclamation 10896?
Proclamation 10896 is a presidential action that leverages Section 232’s authority to protect national security by adjusting steel import regulations. Signed on February 10, 2025, it marks a pivotal moment, with its full implementation kicking in at 12:01 a.m. Eastern Time on March 12, 2025. Between these dates, the regulatory landscape shifts dramatically—here’s how.
Key Changes Between February 10 and March 12, 2025
1. End of Alternative Agreements
February 10, 2025: Countries like Argentina, Australia, Brazil, Canada, the EU, Japan, Mexico, South Korea, the UK, and Ukraine still benefit from alternative tariff agreements established under earlier proclamations (e.g., 9740, 9759). These deals offer exemptions or quotas instead of the full 25% tariff.
March 12, 2025: All such agreements are terminated. Steel imports from these nations now face a uniform 25% ad valorem tariff, aligning with the broader policy set in 2018 under Proclamation 9705.
2. Expanded Tariffs on Derivative Steel Articles
February 10, 2025: Tariffs primarily apply to steel articles under Chapter 73 of the Harmonized Tariff Schedule of the United States (HTSUS). Derivative articles—those not fully steel but containing steel components—aren’t yet subject to the expanded 25% duty.
March 12, 2025: The 25% tariff extends to derivative steel articles listed in Annex I (published March 5, 2025). For non-Chapter 73 HTSUS items, the duty targets only the steel content, tracked via new subheadings like 9903.81.91 and 9903.81.92, especially for Foreign Trade Zone (FTZ) goods admitted under privileged foreign status before March 12.
3. Termination of the Product Exclusion Process
February 10, 2025: Importers can submit product exclusion requests until 11:59 p.m. Eastern Time, seeking relief for steel articles not sufficiently produced domestically. Existing exclusions remain valid.
March 12, 2025: The exclusion process ends entirely. No new requests are accepted after February 10, and all existing exclusions expire by March 12, leaving no tariff relief options.
4. New Reporting Requirements
February 10, 2025: Importers aren’t yet required to report detailed steel content information to U.S. Customs and Border Protection (CBP) for derivative articles.
March 12, 2025: Importers must provide steel content details to CBP for derivative articles under the 25% tariff, effective as soon as practicable. This applies to FTZ entries under new HTSUS subheadings, ensuring accurate duty assessment.
5. HTSUS Updates
February 10, 2025: The HTSUS reflects the pre-Proclamation 10896 framework, with no modifications yet in place.
March 12, 2025: HTSUS Chapter 99, Subchapter III, is updated (per the March 5 notice) with subheadings like 9903.81.91 (for pre-March 12 FTZ derivative articles) and 9903.81.92 (for subsequent entries), enabling precise tariff application on steel content.
6. Foreign Trade Zone (FTZ) Impacts
February 10, 2025: Derivative steel articles in FTZs under privileged foreign status aren’t subject to the new tariff rules.
March 12, 2025: These articles face a 25% tariff on their steel content upon entry for consumption, with subheading 9903.81.91 applying to pre-March 12 admissions and 9903.81.92 covering later entries.
7. Enforcement and Drawback Changes
February 10, 2025: CBP enforcement follows standard procedures, and Section 232 duties remain eligible for drawback.
March 12, 2025: CBP ramps up misclassification reviews with maximum penalties, and the 25% tariff becomes ineligible for drawback—a significant cost shift for importers.
Quick Recap: February 10 vs. March 12
Alternative Agreements: In effect until February 10; terminated by March 12.
Derivative Articles: Limited tariff scope expands to include steel content by March 12.
Exclusions: Active until February 10; gone by March 12.
Reporting: No requirement until March 12, when steel content details are mandatory.
HTSUS: Unchanged until March 12, when new subheadings take effect.
FTZs: No tariffs on pre-admitted goods until March 12, when duties apply.
Enforcement: Standard until March 12, then heightened with no drawback.
Why This Matters
These changes, effective March 12, 2025, reflect a response to surging steel imports (30% of U.S. consumption in 2024) and global excess capacity (projected at 630 million metric tons by 2026). For importers, entry writers, and brokers, adapting to new tariffs, reporting rules, and HTSUS classifications is critical to avoid penalties and manage costs. Stay informed, review your entries, and prepare for a stricter steel import environment!
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