Article By: Rick Walker, Vice President, TradeInsights, LCB/CCS

IEEPA Tariffs

Mexico/Canada

The Federal Register notices implementing the IEEPA 25% tariffs on Mexico and Canada have been released.

Effective 12:01 a.m. ET, March 4, tariffs of 25% will be assessed on products of Canada or Mexico entering the U.S.; except for energy products from Canada which will be assessed a 10% duty.

Note that the tariffs apply to “Products of Mexico/Canada”.

 The following products are NOT subject to the additional tariffs:

Products Excluded from Additional tariff

The additional duty will not apply to:

1. Goods that are for personal use.
2. Goods entered under Chapter 98 HTSUS including:
   • 00.40 or 9802.00.50 (repairs/alterations) tariffs apply on value added in Mexico/Canada
   • 00.60 (metal articles processed abroad) tariffs apply on value added in Mexico/Canada
   • 00.80 (assembly of US components) tariffs apply on value added in China and Hong Kong
   • 9801 goods exported from the US and returned from Mexico/Canada not subject (even if Mexico/Canada origin)
   • Other Chapter 98 goods are excluded
3. Donations of food, clothing and medicine intended to relieve human suffering (claim HTSUS 9903.01.21 for the exemption)
4. Merely informational materials (claim HTSUS 9903.01.22 for the exemption)

No drawback is allowed for these tariffs. Duty drawback is allowed for other eligible duties paid.

There is no grace period for goods in transit.

Section 321 de minimis goods are not impacted until such time as Commerce establishes a system to collect the tariffs.

FTZ Goods

Products of Mexico/Canada admitted to an FTZ after 12:01 a.m. ET on March 4 must be admitted in privileged foreign status. Upon entry for consumption into the U.S., they will be subject to the rate of duty in effect at the time of admission into the zone.

Goods eligible for admission to an FTZ under domestic status are exempt from the tariffs

China

The President amended his prior Executive Order issued on Feb. 1 increasing the tariff from an additional 10% to 20%. NOTE: This amendment means that goods which were entered and paid the initial 10% duty will now owe the 20% duty – effectively a retroactive duty rate increase.

However, for Goods In Transit Excluded until March 7 if:

Goods loaded on a vessel or in transit on the final mode of transport prior to 12:01 a.m. ET on Feb. 1, 2025, even if they are entered or withdrawn from a warehouse for consumption after Feb. 4 will not pay the 10% tariffs, but only until 12:01 a.m. ET on March 7. Entry after that date will require payment of the duties.

Claim HTSUS 9903.01.23 for the exemption.

Steel/Aluminum

The Federal Register notices on Steel and Aluminum will be published on March 5. They are available today for review and we have attached them for your reference.

In summary,

Steel

1. March 12 is the effective date for 25% tariffs on the original steel products and derivatives plus the NEW list of derivative products classified in HTS Chapter 73
2. The effective date for 25% tariffs on NEW derivative steel products listed but not classified in HTS Chapter 73 will be determined by the Secretary of Commerce when a system is in place to collect the duties on those products. The additional duty shall only apply to the declared value of the steel content of the derivative article. The quantity of the steel content shall be report in KG.
3. All Imports of derivative products shall provide any information that may be required by Customs and Border Protection (CBP) to permit administration of the duties.
4. A duty exemption applies ONLY to the NEW list of derivative products provided the product was processed in another country from steel articles that were melted and poured in the U.S.  This same exemption does not apply to steel articles and derivatives on the ORIGINAL lists.

Aluminum

1. March 12 is the effective date for 25% tariffs on the ORIGINAL aluminum products and derivatives plus the NEW list of derivative products classified in HTS Chapter 76.
2. The effective date for 25% tariffs on NEW derivative steel products listed but not classified in HTS Chapter 76 will be determined by the Secretary of Commerce when a system is in place to collect the duties on those products. The additional duty shall only apply to the declared value of the aluminum content of the derivative article. The quantity of the aluminum content shall be report in KG.
3. Note that importers are required to report to CBP the primary country of smelt, secondary country of smelt, and country of cast on imports of all aluminum articles subject to the aluminum and aluminum derivatives Section 232 measures. In addition, all Imports of derivative products shall provide any information that may be required by CBP to permit administration of the duties.
4. A duty exemption applies ONLY to the NEW list of derivative products provided the product was processed in another country from aluminum articles that were smelted and cast in the U.S. This same exemption does not apply to aluminum articles and derivatives on the ORIGINAL lists.
5. If the products are from Russia, or any amount of primary aluminum use to make the article is smelted in Russia or cast in Russia, it is subject to 200% tariffs. In addition, the same exemptions under HTS Chapter 98 do not apply the same way as to other origin goods.

Please contact your V. Alexander account team, or you may also contact our Trade Compliance team at tradeinsights@valexander.com with any questions.