On February 10, 2025, President Trump signed a proclamation entitled “Adjusting Imports of Steel into the United States.” This order announces numerous modifications to earlier proclamations published by President Trump and President Biden. Those prior proclamations imposed a 25 percent ad valorem tariff on imports of specified steel products from most countries following President Trump’s 2018 determination that such products were being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States. Collectively, these have been referred to as the “Section 232” tariffs.
Both President Trump and President Biden authorized exemptions from the Section 232 tariffs since they took effect in 2018. These included tariff exclusions granted to individual importers who submitted requests for specific product exemptions based on a demonstrated lack of availability or quality, or on a national security basis. Both Presidents also exempted certain countries from the tariffs following agreements to pursue alternative means to address the threat to national security.
In the February 10, 2025 proclamation, President Trump determined that, while the initial 25 percent ad valorem tariff has been an effective means of reducing imports, encouraging investment and expansion of production by domestic steel producers, and mitigating the threatened impairment of U.S. national security, the agreements exempting trading partners have been detrimental to U.S. steel production and national security. Exempting those countries from the tariffs has led to significantly increased imports and depressed the U.S. steel industry’s performance.
President Trump further determined that the product exclusion process has allowed a significant volume of imports to enter without regard to Section 232 tariffs, ultimately undermining the purpose of the tariffs and threatening to impair national security.
Accordingly, the President announced the following changes to the Section 232 tariffs on steel products:
- As of March 12, 2025, all imports of steel articles and derivative steel articles, including those imports that were previously exempted, will be subject to the 25 percent additional ad valorem tariff on steel articles and derivative steel articles;
- As of March 12, 2025, additional derivative steel articles to be identified in a forthcoming Federal Register notice will be subject to the same 25 percent ad valorem tariff, except for derivative steel articles processed in another country from steel articles that were melted and poured in the United States;
- As of February 10, 2025, the Department of Commerce will no longer consider or grant tariff exclusions for specific products, although previously granted product exclusions will remain effective until their expiration date or until excluded product volume is imported, whichever occurs first. All existing general approved exclusions will terminate on March 12, 2025.
Analysis
This action by President Trump will have certain immediate effects, and other potentially delayed effects.
The termination of the exclusions process, with immediate effect, and the termination of existing general exclusions on March 12, may impact shipments of covered steel products and derivative steel articles currently bound for the United States, which would not have been anticipated when the purchase contracts for those products were concluded. The proclamation appears to provide that an importer that has been granted an individual product exclusion would not be required to pay the 25 percent tariff, nor would an importer entering a product prior to March 12 that is covered by a general exclusion. However, no new product exclusions will be granted.
Nevertheless, it remains possible that the Administration will announce additional changes in the coming weeks. Notably, the January 20, 2025 proclamation entitled “America First Trade Policy” directed Administration officials to review and assess the effectiveness of exclusions, exemptions, and other import adjustment measures on the steel and aluminum Section 232 tariffs, and to make recommendations by April 1, 2025. Those recommendations may include additional proposed changes to the Section 232 tariffs.
Importers adversely affected by changes to the tariffs may attempt to seek relief from the courts, but the likelihood of success of any such challenge would seem to be low, given the President’s broad authority and discretion in matters of national security.
The delayed effective date of the re-imposition of the Section 232 tariffs on U.S. trading partners – March 12, 2025 – suggests the possibility of new “alternative agreements” to avoid the tariffs. When President Trump announced on Friday, January 31, 2025, his intention to impose 25 percent tariffs on all imports from Mexico and Canada, effective the following Tuesday, both Mexico and Canada were able to schedule telephone calls with the President on Monday, and during those calls they reportedly made concessions sufficient to avoid the tariffs, for now. It remains to be seen whether the Administration will be amenable to similar informal negotiations with U.S. trading partners in this context.
In any case, there is a strong incentive for exporters of steel products and steel derivative articles in previously exempted countries (i.e., Argentina, Australia, Brazil, Canada, EU countries, Japan, Mexico, South Korea, Ukraine, and the United Kingdom) to now surge shipments to the United States for entry prior to March 12. A similar surge in imports is reported to have occurred following then President-elect Trump’s post-election announcement that he intended to impose across-the-board tariffs early in the new Administration.