Section 232 Tariff Breaks for Ag, Mobile Industrial and HVAC Equipment Take Effect June 8
Agricultural equipment, mobile industrial equipment and machinery, and heating, ventilation and air conditioning equipment will all get breaks from Section 232 steel, aluminum and copper tariffs under a proclamation issued by President Donald Trump late on June 1. The tariff reductions take effect at 12:01 a.m. ET June 8.
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On the other hand, the proclamation also adds steel racks under subheadings 9403.20.0075, 9403.20.0082 and 9403.99.9040 and aluminum lithographic plates under subheading 3701.30.00 to the list of goods subject to 25% Section 232 tariffs on steel and aluminum derivatives, respectively. Those changes also take effect June 8.
Under the proclamation, tariff subheadings covering agricultural equipment and HVAC equipment will be added to the Annex III list of goods temporarily subject to an all-in 15% Section 232 tariff under existing subheadings 9903.82.10 and 9903.82.11 until the end of 2027. The newly added subheadings had previously been subject to the 25% tariff on derivatives.
Those subheadings removed from the steel derivatives list and added to the 15% temporary tariff list are: 8407.90.10, 8415.10.60, 8415.10.90, 8415.81.01, 8415.82.01, 8415.90.80, 8419.81.50, 8432.10.00, 8432.90.00, 8433.20.00, 8433.51.00, 8433.59.00, 8433.90.50, 8479.89.55, 8479.89.65, 8516.29.00, 8701.30.10, 8701.91.10, 8701.92.10, 8701.93.10, 8701.94.10, 8701.95.10, 8703.21.01, 8706.00.30, 8708.29.2120, 8708.40.30, 8708.40.60, 8708.92.10, 8708.92.60, 8708.93.15, 8708.93.30, 8708.99.23, 8716.80.10 and 8716.90.10.
Removed from the aluminum derivatives list and added to the 15% temporary tariff list are subheadings 8415.90.8010, 8415.90.8020, 8415.90.8045 and 8415.90.8085 and 8708.29.2130.
A list of subheadings covering mobile industrial equipment and machinery will be eligible for temporary tariff breaks if they are imported from certain countries or qualify for USMCA treatment.
The list, added as new U.S. Note 16(c)(xi), includes subheadings 8427.10.40, 8427.10.80, 8427.20.40, 8427.20.80, 8427.90.00, 8429.11.00, 8429.19.00, 8429.20.00, 8429.30.00, 8429.40.00, 8429.51.10, 8429.51.50, 8429.52.10, 8429.52.50, 8429.59.10, 8429.59.50, 8431.20.00, 8431.42.00, 8431.49.90, 8701.10.01, 8701.30.50, 8701.91.50, 8701.92.50, 8701.93.50, 8701.94.50, 8701.95.50, 8705.10.00 and 8705.20.00.
Such goods from countries that have signed tariff deals with the U.S. -- Argentina, Ecuador, El Salvador, Guatemala, Japan, South Korea, Liechtenstein, Switzerland, Taiwan, the U.K. and the EU -- will face a 15% all-in rate inclusive of most-favored nation duties, under new subheading 9903.82.22.
For mobile and industrial equipment and machinery that qualifies for USMCA treatment, the normal 25% tariff will only apply to non-U.S. content, though the total Section 232 tariff can’t fall under 15%.
Two new subheadings implement the USMCA tariff break. New duty-free subheading 9903.82.21 will apply to U.S. content that doesn’t exceed 40% of the value of the article (which is the mechanism that limits the tariff break to 15%). New subheading 9903.82.22 will be used to report the value of non-U.S. content or U.S. content that exceeds 40% of value, and will apply the normal 25% tariff rate.
The temporary tariff reductions for mobile industrial equipment expire at the end of 2027. If none of the tariff breaks listed above apply, the good will be subject to the normal 25% tariff, or a 10% tariff if made entirely using U.S. steel or aluminum.
The proclamation also provides for reduced tariffs for parts classified in subheadings of chapters 84, 85 and 87 that “will be used exclusively in the manufacturing of agricultural equipment or fixed industrial equipment” now listed in the 15% tariff list (U.S. Notes 16(c)(ix) and (x)), or for the manufacturing of mobile industrial equipment that is newly eligible for reduced tariffs (U.S. Note 16(c)(xi).
New subheadings 9903.82.25 and 9903.82.26 will apply a 15% all-in rate to such parts. New subheadings 9903.82.23 and 9903.82.24 will apply a 10% all-in rate to such parts that are made entirely of U.S. steel or aluminum.
The proclamation also changes the threshold for when a good is made “entirely” of steel, aluminum or copper and qualifies for a 10% Section 232 tariff. Previously, that threshold had been 95% U.S. metal. The proclamation lowers that threshold to 85%.