Late on the afternoon of June 3, the President issued a proclamation to increase from 25% to 50% the section 232 tariffs on articles and derivatives of steel and aluminum, effective at 12:01 am on June 4. While this official proclamation allowed only seven hours’ notice, the President had said on social media and to the press that he planned to take this action as of June 4.
The proclamation has four important effects: First, the section 232 duty rate applicable to steel articles and derivatives and aluminum articles and derivatives increases to 50%, as of June 4.
Second, pursuant to a recent agreement, products of the UK are spared this increase, at least until July 9, so steel articles and derivatives and aluminum articles and derivatives that are products of the UK remain subject to only 25% section 232 duty.
Third, the order of priority in the April 29 unstacking order is reversed, so that non-USMCA originating products of Canada and Mexico will be subject to 50% section 232 tariffs rather than 25% IEEPA tariffs.
Fourth, the proclamation states, notwithstanding any prior proclamation or executive order, that the non-aluminum, non-steel content of all aluminum and steel articles and derivative articles shall be subject to reciprocal tariffs, but that section 232 duties shall apply only to the steel content of articles in chapter 73 of the HTSUS and only to the aluminum content of articles in chapter 76 of the HTSUS. This appears to broaden the range of aluminum and steel derivatives on which importers must only pay section 232 duty on the steel or aluminum value in the derivatives, but to subject articles to reciprocal tariffs on any value not subject to section 232 tariffs.
As with prior proclamations related to steel and aluminum, the proclamation prohibits drawback of section 232 duties and provides for the treatment of steel and aluminum articles and derivatives in privileged foreign status in foreign trade zones.
