The Biden administration has announced a temporary, one year, suspension of the Section 232 duties on steel products from Ukraine. The suspension will take effect for products imported on and after 12:01 AM EDT on June 1, 2022. The action is intended to provide moral support and minor economic support for Ukraine. Secretary of Commerce Gina M. Raimondo discussed the importance of the steel sector to the Ukrainian economy and the intent of the US government to provide support.
Press reports have noted that the action is largely symbolic at this time, given the destruction of the largest Ukrainian steel mill, in Mariupol, and the reduced production and shipping problems faced by other mills. Even at pre-invasion capacity, Ukraine’s exports to the US amounted to just 130,652 metric tons, less than 0.5% of US steel imports.
The formal suspension of the Section 232 duties was made through a Presidential Proclamation dated May 27, 2022. https://www.whitehouse.gov/briefing-room/presidential-actions/2022/05/27/a-proclamation-adjusting-imports-of-steel-into-the-united-states-ukraine/
The suspension also applies to derivative steel products from Ukraine otherwise covered by Section 232 for the same period, ending at 11:59 PM EDT on June 1, 2023. Ukrainian steel entered into a Foreign Trade Zone (FTZ) in “privileged foreign status” prior to the effective date of the suspension will continue to be subject to Section 232 duties if entered for consumption into the US, including entries filed after the suspension date for new shipments.
The duty suspension places Ukraine under the same Section 232 exemption as Canada, Mexico, and Australia. It does not require any of the absolute quota restrictions in place for Argentina, Brazil, and South Korea, or the tariff rate quotas (TRQs) applicable to the EU, the UK, and Japan.
Although the Section 232 duties will be suspended, many steel products from Ukraine remain subject to antidumping Orders or suspension agreements. The Orders cover rebar, hot rolled flat products, carbon and alloy steel wire rod, OCTG, prestressed concrete strand, and seamless pipe. The duty rates range from 7.47% (OCTG, except Interpipe at 27.80%) to 90.33% (hot rolled flats), depending on product and supplier. The US retains its prospective AD duty application, so AD rates in the US are only deposit rates, subject to adjustment through annual reviews. There is also one suspension agreement (cut-to-length plate.)
Apart from duty concerns, export of steel from Ukraine is also affected by other issues including damaged mills, reduced production, and significant shipping concerns.
Steven W. Baker
AMSCI Customs Committee Chair
swbaker@swbakerlaw.com