Base Metals CEE Updates Guidance on Steel/Aluminum Content Reporting, Includes Iron
CBP's base metals Center of Excellence and Expertise updated the informal guidance it has been sending to importers for calculating steel, aluminum and copper content for Section 232 tariff purposes, which includes new guidance on iron derivatives.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
The updated guidance, dated March 15, maintains most of the previous update from Jan. 15 (see 2602110082).
The new section on Section 232 and articles of iron said that iron content is determined in the same manner as steel and aluminum. Certain irons, such as cast iron, pig iron and wrought iron, may not be subject to Section 232. The guidance said that it's not acceptable to break down the chemistry of a steel article to arrive at a non-Section 232 iron content.
Lori Mullins, director of operations at Rogers and Brown for Houston, Atlanta and Norfolk, said there's previously issued FAQ guidance on CBP's website that asks when an imported product is classed in a Harmonized Tariff Schedule heading subject to Section 232 duties that has no steel, but does have iron content, whether it's subject to Section 232 steel derivative duties. The answer on the website is "No."
"The answer here, on this guidance, now says that for iron articles subject to 232, the iron content value is determined in the same manner of steel and aluminum," she said.
Mullins said the HTS notes say iron and steel are generally treated as the same metal. The new guidance says that until June 4, 2025, no distinction was made between steel and iron in Section 232 assessment. She said she thinks there's more clarity needed on iron guidelines.
The CEE did give detailed time frames for iron. Notably, it says from March 12, 2025, through June 3, 2025, derivative iron articles and parts classified outside chapter 73 don't pay Section 232 duty, with some exceptions. However, since June 4, 2025, iron articles and parts classified in chapter 73 and derivative articles classified elsewhere don't pay Section 232 duty.
Mullins said importers should pay attention to the dates and see if they were paying Section 232, or excluding it because it contained iron, with those time frames.
The CEE added that if an “obviously non-steel or aluminum article” like perfume is on a Section 232 derivative tariff numbers list, only the cost of the container is subject to the Section 232 duty. Lori Mullins said this aspect of the new guidance wasn't "surprising" for the industry.
It also clarifies that, for costs attributable to both the non-steel, aluminum or copper content and the steel, aluminum or copper content, like labor, profit, packaging and more, an acceptable method is to apportion the costs to both lines based on a value ratio.
"I think most companies aware of previous guidance had some sort of apportionment that they were doing, either by weight or by value, for those costs across the non-steel and steel content, or non-steel and non-aluminum," Mullins said.
Mullins said this part of the updated guidance answered that question and clarified that it is acceptable to apportion cost to both lines based on value ratio. Denise Calle, a principal attorney with Olsson Frank, said that, provided the cost data and methodology are well documented, it gives a "defensible framework for allocating cost."
Mullins said it is important that importers who have the additional cost of production and labor have the guidance that apportionment is allowed to both lines based on value ratio. However, she said, there's no guidance from CBP on what an importer is supposed to provide as documentation when asked.
"I think importers just having a good system in how they're apportioning that, if it's based on value," she said. "So, the percentage of the value and then those costs. So, you would work that backwards."
Mullins said the trade community had been asking for binding guidance in FAQs, but has only received this unsigned guidance. CBP didn't immediately comment.
"I think, the industry, we would be better served if Customs would at least publish it," she said, adding that it would make the document feel more formal.
Calle said in the statement that while the guidance provides more clarity, "it still leaves importers doing a great deal of heavy lifting on Section 232 content calculations, with many unanswered questions remaining."