Trump Administration Issues Section 232 Tariffs on Steel and Aluminum: U.S. Considerations

Through a presidential proclamation, the Trump Administration on Feb. 10, 2025, announced the reinstatement of a 25 percent tariff on all steel imports and an increase in aluminum tariffs from 10 percent to 25 percent. The tariffs apply to goods entered into the U.S. for consumption or withdrawn from a warehouse for consumption on or after March 12, 2025.

This expansion of Section 232 tariffs revokes previously negotiated country-specific exemptions and quota arrangements established under the original Section 232 tariffs in 2018. As a result, all previously exempted or quota-managed countries – including Australia, South Korea, Canada, Mexico, Brazil, Japan, the United Kingdom and the European Union (EU) – will now be subject to the full 25 percent tariff on their steel and aluminum exports to the U.S. The decision is expected to have far-reaching implications, not only for American manufacturers that rely on imported steel and aluminum but also for global trade relations.

The 2018 Section 232 tariffs on steel (25 percent) and aluminum (10 percent) were originally implemented under the first Trump Administration to address national security concerns related to global overcapacity, particularly the subsidized steel production in China. Section 232 of the Trade Expansion Act of 1962 allows the president to impose import restrictions based on an investigation and affirmative determination by the U.S. Department of Commerce that certain imports threaten to impair U.S. national security.

The Section 232 investigations found that excessive imports had weakened the domestic steel and aluminum industries, reducing their ability to meet national defense and critical infrastructure needs. Additionally, the Commerce Department determined that global overcapacity, driven by foreign government subsidies and unfair trade practices, had led to declining production, plant closures and job losses in the U.S. industry.

Product Exclusions

In addition to revoking general product exclusions for countries with alternative agreements or exclusions under the 2018 Section 232 tariffs, the proclamation eliminates and modifies the product exclusion process for steel and aluminum imports. It removes the Commerce Secretary's authority to grant relief for products deemed insufficiently available or lacking in satisfactory quality in the U.S. Effective immediately, the Commerce Secretary is barred from considering new product exclusion requests or renewing existing ones. Previously granted exclusions will remain valid only until their expiration dates or until the approved volume has been imported, whichever comes first.

The proclamation creates a narrow exclusion for derivative steel products processed in another country if they originate from steel articles that were melted and poured in the U.S. and for derivative aluminum products processed in another country if they originate from aluminum articles that were smelted and cast in the U.S.

Product Inclusions

Notably, the proclamation mandates that by May 11, 2025, the Commerce Secretary must establish a process allowing U.S. steel and aluminum producers, as well as industry associations representing them, to request the inclusion of additional derivative products under these tariffs. To qualify, petitioners must demonstrate that rising imports of these products pose a threat to U.S. national security. This provision offers U.S. steel and aluminum producers a direct avenue to engage with the Trump Administration, allowing them to seek expanded tariff protections on derivative products.

Conclusion and Considerations

Several key open questions remain regarding implementation of the Section 232 tariffs on steel and aluminum. First, it is not clear the full extent of the derivative products the new tariffs will capture. Second, whether the new Section 232 duties will stack on top of higher duties recently announced but temporarily paused against Canada and Mexico, as well as those implemented against China, is unsettled. In the event President Donald Trump's planned 25 percent tariffs on steel and aluminum imports would stack on top of other duties on Canadian goods, it would result in a total 50 percent tariff if threatened duties on all imports from Canada are enacted in March 2025. Finally, President Trump has indicated he will take executive action to implement a reciprocal tariff scheme, which will further complicate the tariff landscape. The Trump Administration has provided no details regarding a reciprocal tariff scheme, but it could factor in non-tariff barriers, including subsidies and value-added taxes.

Given that the president's actions are based, in part, upon the 2018 Section 232 investigation findings, it is anticipated that parties may bring litigation regarding the timeliness and appropriateness of such actions taken approximately seven years after the completion of the investigations. Further, numerous foreign trading partners – including a number of EU member states – have threatened retaliation against President Trump's planned tariffs on all steel and aluminum imports, potentially reviving a transatlantic trade war unless a deal can be brokered over the next month.

Clients should take immediate steps to determine whether and to what extent their business operations will be impacted by these tariffs or the retaliatory tariffs likely to be imposed on U.S. exports. Holland & Knight lawyers and professionals can advise on technical matters related to the tariffs, as well as policy matters related to engaging legislators and policymakers to convey important information regarding the effects of these tariffs on the continuity of business operations.

For further insights and guidance, please contact the authors or another member of Holland & Knight's International Trade Group.

Please note: Holland & Knight attorneys Luis Rubio Barnetche, Turenna Ramirez Ortiz, Rodolfo Rueda and Uriel Martinez contributed to this alert.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.