Section 232 Valuation in a Gray Area: What Importers Need to Know | Customs & International Trade Law Blog

Over the previous 12 months, the Part 232 tariff panorama for metal and aluminum has shifted quickly. A sequence of presidential actions in 2025 considerably expanded the scope of Part 232 metal and aluminum duties whereas providing restricted instruction on how these duties needs to be assessed. Consequently, corporations importing metal and aluminum-containing merchandise are dealing with unclear steerage at a time when CBP scrutiny – and enforcement – is rising. This lack of clear steerage has led to a whole lot of importer confusion and to the lawsuit mentioned under.

Background on New Metal and Aluminum Tariffs

On February 11, 2025, President Trump issued two Proclamations imposing enhanced import tariffs on metal and aluminum merchandise underneath Part 232 of the Commerce Growth Act of 1962. Whereas further Part 232 tariffs had been in place on sure metal and aluminum merchandise because the first Trump Administration in 2018, the orders eradicated sure exemptions from the tariffs, expanded their scope to cowl further merchandise, and elevated the tariffs on lined aluminum items from 10% to 25%.

On February 18, 2025, two Federal Register Notices had been revealed that included lists of “spinoff” metal and aluminum merchandise topic to the 25% tariffs on metal and aluminum underneath Part 232. The Federal Register Notices, which embody the precise Harmonized Tariff Schedule of the US (HTSUS) classifications for the spinoff merchandise in Annex 1, can be found right here (metal) and right here (aluminum). The tariffs had been elevated from 25% to 50% efficient June 4, 2025.1 On August 19, 2025, one other Federal Register Discover was revealed, including 407 HTSUS classifications to the checklist of merchandise that shall be thought of as steel-aluminum spinoff merchandise.

Approaches to Valuation

CBP has revealed FAQs and CSMS messages on metal and aluminum about learn how to calculate and report the worth of the metal and aluminum content material of metal and aluminum spinoff articles. Nonetheless, there have been totally different interpretations of this steerage, together with by CBP itself.

The FAQ reads,

“The worth of the metal/aluminum content material needs to be decided in accordance with the rules of the Customs Valuation Settlement, as carried out in 19 U.S.C. 1401a. Thus, the worth of the metal/aluminum content material is the overall worth paid or payable for that content material, which is the overall cost (direct or oblique, and unique of any prices, costs, or bills incurred for transportation, insurance coverage, and associated companies incident to the worldwide cargo of the merchandise from the nation of exportation to the nation of importation) made/to be made for the metal/aluminum content material by the client to, or for the advantage of, the vendor of the metal/aluminum content material. Usually, this might be primarily based on the bill paid by the client of the metal/aluminum content material to, or for the advantage of, the vendor of the metal/aluminum content material.”

The CSMS message on metal states that “the place the worth of the metal content material is lower than the entered worth of the imported article, the great should be reported on two strains.  The primary line will characterize the non-steel content material, whereas the second line will characterize the metal content material.” The CSMS message states the identical factor for aluminum.

Some importers interpret this steerage to imply that the worth of the metal or aluminum content material in a spinoff product is the worth the international producer paid for the metal or aluminum. Different importers (and at the moment CBP’s Base Metals Middle of Excellence and Experience, in casual steerage) interpret this steerage to imply the worth of metal or aluminum primarily based on the worth paid for the spinoff product by the U.S. importer. CBP has issued Customs Kinds 28s and 29s that replicate this interpretation.

CBP has not issued any formal steerage within the type of a customs ruling, further FAQ, or Cargo System Messaging Service message addressing these totally different interpretations.

New CIT Case

A lawsuit was lately filed within the U.S. Courtroom of Worldwide Commerce (CIT), difficult how CBP has been valuing and making use of Part 232 tariffs on metal and aluminum spinoff merchandise. 

On the middle of the lawsuit is the casual steerage supplied by the Base Metals CEE talked about above. Specific Fasteners, Ltd. of Illinois filed the lawsuit, arguing that its imports of screws and fasteners had been unlawfully assessed Part 232 metal duties.2 In keeping with the plaintiff, CBP lately started making use of 232 duties to your entire U.S. customs worth of imported screws and fasteners, which incorporates machining, fabrication, overhead, the producer’s revenue, and different prices.

Specific argues that the general public Part 232 FAQs restrict the 232 tariffs to the worth of the metal content material of the product, as decided by the worth their international provider paid for the metal, and that this variation in valuation method was by no means revealed and subjected to rulemaking procedures and is subsequently an illegal and arbitrary departure from established company steerage. 

What Importers Ought to Do

Diaz Commerce Regulation recommends taking the extra conservative method mirrored in CBP’s most up-to-date, albeit casual, steerage and reporting the metal and aluminum worth primarily based on the U.S. customs worth of the metal and aluminum, which incorporates machining, fabrication, overhead, and the producer’s revenue. If the article consists of non-steel, non-aluminum content material akin to wooden or plastic, we suggest allocating the machining, fabrication, overhead, and revenue throughout the metal/aluminum and non-steel/non-aluminum content material in an inexpensive method. We additional suggest monitoring the liquidation of affected entries and protesting them inside 180 days primarily based on the pending litigation. For importers who select to report the worth of the metal and aluminum primarily based on the worth their international producer paid for these supplies, we urge you to think about submitting a previous disclosure to pay the responsibility distinction if the courtroom guidelines in favor of CBP within the pending Fasteners case. All importers ought to prioritize correct documentation and recordkeeping, as CBP might ask for detailed breakdowns and supporting evaluation at any time.

Diaz Commerce Regulation will proceed to observe for developments and can present further data because it turns into out there. Within the meantime, contact us for help with valuation procedures, recordkeeping, employees coaching, and extra. 305-456-3830, data@diaztradelaw.com

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