President Biden has issued two proclamations aimed at preventing China and other countries from evading Section 232 tariffs on steel and aluminum by transshipping such goods through Mexico. This change “would impact small volumes of existing shipments,” a Bloomberg article said, “but is meant to deter what could otherwise be a forthcoming spike.”
Under one proclamation, a Section 232 tariff of likely 25 percent will be imposed on steel and steel derivative articles imported from Mexico if the steel is melted and poured in a country other than the U.S., Canada, or Mexico. Similarly, the other proclamation imposes a Section 232 tariff on aluminum and derivative aluminum articles imported from Mexico if the country of primary smelt, secondary smelt, or most recent cast of the aluminum is China, Russia, Belarus, or Iran. If such country is China, Belarus, or Iran, this tariff will likely be 10 percent; if it is Russia, the tariff will be 200 percent.
These changes are effective for goods entered or withdrawn from warehouse for consumption on or after 12:01 am EDT on July 10 and will remain in effect until further notice. Imports of covered articles that were entered into a foreign-trade zone under privileged foreign status before that time, and entered for consumption on or after that time, will be subject to the tariffs.
Imports from Mexico of steel and aluminum and their derivative products that do not meet the above descriptions will continue to be exempt from the Section 232 tariffs. However, importers will have to provide U.S. Customs and Border Protection with the information necessary to identify the countries where the steel was melted and poured (for steel articles) or where the aluminum was smelted and cast (for aluminum articles). Such imports must also be accompanied by a certificate of analysis to qualify for the tariff exemption.
According to the Office of the U.S. Trade Representative, Mexico is also taking steps to deter evasion of the Section 232 tariffs by (1) requiring importers of steel to list the country of melt and pour on mill test certificates and (2) increasing tariffs on imports of steel, aluminum, and other products from countries with which it does not have a free trade agreement.
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