Tariff Talk

Section 232 tariffs were addressed today through two Executive Orders signed by the President. One makes changes to the rates and how metal tariffs are assessed, as well as introduces the expected new tariffs on pharmaceutical products and ingredients. Notices from the Federal Register and U.S. Customs are still needed to provide full details of these changes.

Changes to metals are concentrated on manufactured goods. The update aims to impose tariffs on the full value of an imported article if it is overwhelmingly made of metal. Lists are just being issued identifying which items will be subject to each tier. The changes go into effect for new entries on Monday, April 6. An article made entirely, or almost entirely, of aluminum, steel, or copper will pay a flat 50%; the Executive Order cites coils and sheets. Derivative articles made substantially of these metals will see 25%, and certain industrial equipment will start at 15%, with increases post-2027. There are lowered rates for goods made of U.S. metal and no tariff on articles with 15% or less of the identified metal. As lists and details are still being issued, further information will be provided in a follow-up.

A 100% tariff on patented pharmaceutical products and ingredients will take effect in 120 days for certain large companies and in 180 days for smaller companies. It is expected that a list of impacted HTS codes and criteria for company size will be released in the coming days. For the first year, general products will not be included. Rates are lower for the EU, Japan, Korea, Switzerland, and Liechtenstein at 15%. The order states that strict mandates and oversight will be in place.

Customs guidance will be forthcoming for each of these program changes. As OCEANAIR is notified, we will communicate updates to our clients to help assess the impact.