Earlier today the U.S. Department of Commerce (Commerce) Bureau of Industry and Security (BIS) released its framework by which U.S. producers and their industry associations may petition to cover additional derivative aluminum and steel articles under the duties imposed pursuant to Section 232 of the Trade Expansion Act of 1962 (Section 232). Starting tomorrow, May 1, eligible entities will have two weeks to submit Inclusion Petitions for consideration by BIS.
Generally speaking, Inclusion Petitions must establish that the article in question is in fact a derivative steel and/or aluminum article, and that increased imports threaten U.S. national security or otherwise undermine the Section 232 investigation’s objectives. Once Inclusion Petitions have been reviewed by BIS and posted online, the public will have a further two weeks to comment upon the same.
Separately, as the rule is “interim final” in nature, interested parties may also comment on the procedures themselves. This second comment period will end June 14, 2025.
Ahead of Schedule
On February 10, 2025, the President issued two Executive Orders amending the existing Section 232 duty regimes on steel, derivative steel products, aluminum, and derivative aluminum products. Among other changes, these Executive Orders each provided BIS until May 11, 2025, to create a process through which Commerce could consider whether to apply the steel and aluminum 232 duties to additional derivative steel and aluminum articles, respectively. While the Executive Order provided certain broad parameters, e.g., Commerce will have 60 days to rule on a request to cover an additional steel derivative article under the steel 232 duties, the specifics were not yet known and the process itself was not available before today.
Process Established
BIS has established three annual windows for submitting petitions to include additional derivative steel and/or aluminum articles (Inclusion Petitions), beginning May 1, September 1, and January 1, respectively. During each opening, BIS will accept Inclusion Petitions for a two-week period.
Petitioners must be directly affected parties located in the United States and may be producers of steel, aluminum, or derivative articles, or industry associations representing one or more such producers.
Submissions must be 30 pages or less, be made via email in PDF format, and include the following information:
- Clear identification of the applicant (e., individual, company, or trade association);
- A precise definition of the derivative article;
- The eight or ten-digit HTSUS classification requested to be included in the scope of the ad valorem tariffs;
- An explanation of why the article is a steel or aluminum derivative article, including, to the extent practicable, information on the total value of the article’s steel and/or aluminum content as a share of the derivative article’s total value;
- Information on the domestic industry affected;
- Statistics on imports and domestic production; and
- A description of how and to what extent imports of the derivative article threaten to impair the national security or otherwise undermine the objectives set forth in the 2018 Steel and Aluminum Section 232 investigation reports or related Proclamations.
Inclusion Petitions will be reviewed on a rolling basis, and non-compliant submissions may (in BIS’ discretion) be given 48 hours to cure deficiencies.
After the conclusion of each two-week Inclusion Petition submission window, public versions of compliant and accepted Inclusion Petitions will be posted online at regulations.gov. Interested parties will thereafter have 14 days within which to comment on a given Inclusion Petition via regulations.gov. Both Inclusion Petitions and comments thereon may include business confidential information, but must be accompanied by a non-confidential version.
BIS’ standards for assessing each Inclusion Petition are briefly summarized as follows:
- Whether the described product at the eight- or ten-digit HTSUS classification is a derivative steel or aluminum article; and
- Whether such derivative article imports have increased in a manner that threatens to impair the national security or otherwise undermine the objectives set forth in the Section 232 investigation reports or related Inclusions Proclamations.
Within 60 days of an Inclusion Petition having been posted on regulations.gov, BIS will sign an affirmative or negative determination on the petition. Determinations will be publicly posted and summarize the rationale underlying the determination. Thereafter, the Section 232 steel and aluminum annexes will be updated as necessary via the Federal Register to add newly-included derivative products. Duties on the newly included derivative products will take effect shortly after publication in the Federal Register.
Public Comment Period
BIS will establish a docket on regulations.gov where interested parties may submit comments on the process described above. Interested parties will have until June 14, 2025, to submit comments for BIS’ consideration. Such comments may result in further adjustments to the process set out in BIS’ interim final rule.
Evolving APA Exemption Claims
As we previewed in March, the Administration has signaled its view that the foreign affairs and military exceptions to the Administrative Procedure Act’s (APA) procedural requirements are broadly applicable to trade-related rulemaking. This set the stage for agencies such as Commerce and U.S. Customs and Border Protection to take the position that types of rules that were in the past subjected to advance notice, public comment, and a lag between finalization and entry into force can now be promulgated essentially overnight. Here, too, the Administration has subtly modified its approach to APA procedural requirements. Although it does in fact provide a comment period as described above, BIS has simultaneously asserted the “military functions” exception, stating that it is not bound to provide public comment or delay the rule’s effective date “because this regulation involves a military function of the United States (5 U.S.C. 553(a)(1)) because steel and aluminum, as well as certain steel and aluminum derivatives, are essential products for producing U.S. weapons that are vital for protecting U.S. national security.” BIS has also invoked the general “good cause” exception to APA procedural requirements. These are two independent reasons for the same practical result.
The specific assertion of the “military functions” exception is a change from prior BIS rulemaking pursuant to Section 232, which formerly deployed the more open-ended “military or foreign affairs function” formulation in claiming to be exempt from APA requirements. In essence, this notice goes on to assert that the “military functions” exception to default APA procedures is applicable for the same reasons that Section 232 permitted the imposition of the tariffs in the first place. If this is indeed the Administration’s view, we may see Commerce adopt a similar stance in connection with future rulemaking related to other Section 232 tariff regimes.
Regulatory Cleanup
With the President’s February Executive Orders having withdrawn authority for Commerce to provide for new or extended product-specific exclusions, those processes were subsequently eliminated. Today’s rule performs regulatory cleanup to remove the regulatory provisions previously associated with the now-eliminated exclusions processes.
Driving Tariff Development
Parties with an interest in the coverage of Section 232 tariffs on steel and aluminum derivative articles may wish to participate in these newly created procedures, which permit participation both in support of and in opposition to petitions to expand duty coverage. As seen in other contexts, the concept of a “derivative article” that has been embraced by the Administration can be broad. Most recently, the Administration expanded aluminum derivative articles to include, e.g., canned beer. Thus, interested parties may wish to consider their own supply chains in order to identify imported articles that may be susceptible to future petitions. Cassidy Levy Kent regularly assists clients in advocating for optimal tariff outcomes before BIS.