On August 6, 2020, President Trump issued an Executive Order imposing 10% Section 232 duties on Canadian origin non-alloyed unwrought aluminum articles classified in HTSUS subheading 7601.10. These duties will commence for consumption entries or warehouse withdrawals on or after August 16, 2020. Clients may still utilize previously-approved Section 232 product exclusions for Canadian-origin non-alloyed unwrought aluminum articles. If a previously-granted product exclusion has expired, those product exclusions may be renewed. Duty drawback will not be available with respect to these Section 232 duties.
For FTZ clients involved in distribution only, Canadian non-alloyed unwrought aluminum admitted into an FTZ in either Privileged Foreign (PF) or Non-Privileged Foreign (NPF) status prior to August 16, 2020 will be subject to the 10% Section 232 duties when the merchandise is entered for consumption on or after August 16, 2020. Note that the Foreign-Trade Zones Act § 81c legal structure of Privileged Foreign status was negated in the Section 232 Presidential Proclamation. This means that Privileged Foreign (PF) status will not provide the company with the usual statutory protection with respect to additional or higher duties assessed on the merchandise subsequent to the date the Privileged Foreign (PF) status was elected. Clients are urged to file Customs entry on any on-hand inventory of Canadian non-alloyed unwrought aluminum prior to August 16 so as to avoid the additional 10% duty.
For FTZ clients involved in production, Canadian non-alloyed unwrought aluminum admitted into an FTZ in Non-Privileged Foreign (NPF) status admitted into an FTZ prior to August 16 to be used in production/manufacture should not be subject to the additional 10% duty on the admitted aluminum as the entry is on the finished product. If any of the Canadian non-alloyed unwrought aluminum used in production was admitted in Privileged Foreign (PF) status, the value of said aluminum will be subject to the 10% Section 232 duties when the finished article is entered for consumption on or after August 16, 2020. Finally, non-alloyed unwrought aluminum classified in HTSUS subheading 7601.10 will not be subject to these duties “merely by reason of manufacture” in a U.S. FTZ.
These Section 232 duties are in response to increased imports of Canadian-origin aluminum, and the E.O. indicates the U.S. will monitor imports for surges of exempt Canadian alloyed, further processed, or wrought aluminum articles to ensure non-alloyed unwrought aluminum shipments are “not simply reoriented.” Prime Minister Trudeau of Canada has vowed to impose retaliatory tariffs on U.S. products in response to the U.S. action.
Please contact Marshall Miller, Brian Murphy, Sean Murray, or Ryan Thornton with questions or for assistance.