New Section 232 Tariffs
The President announced on September 25 that three new tariff categories will take effect October 1:
- Pharmaceuticals (expected at 100%)
- Timber, Lumber & Furniture
- Heavy Trucks (expected at 25%)
Timber, Lumber, and Furniture
The White House posted an official notice on September 29, announcing that the effective date had been moved to October 14.
Here are the high-level details provided in the Fact Sheet:
- The Proclamation imposes:
- A 10% global tariff on imports of softwood lumber
- A 25% global tariff on certain upholstered furniture, which will increase to 30% on January 1
- A 25% global tariff on kitchen cabinets and vanities, which will increase to 50% on January 1
- Trading partners who negotiate may be able to secure an alternative to the pending tariff increases.
- The United Kingdom, the European Union, and Japan will enjoy more favorable treatment that reflects the terms of their trade deals with the United States.
- The Section 232 tariff on subject wood imports from the United Kingdom will not exceed 10%.
- The combined Section 232 tariff and most-favored nation tariff on subject wood imports from the European Union and Japan will not exceed 15%.
- Products that are not subject to these Section 232 tariffs will generally be subject instead to reciprocal tariffs.
- The treatment of products on the list of Potential Tariff Adjustments for Aligned Partners (PTAAP) remains unchanged unless an antidumping or countervailing duty order applies.
Read the full Executive Order HERE
Read the full Lumber and Timber Annex HERE (which also includes impacted furniture products)
Read the Fact Sheet HERE
These tariffs stack on all other active tariffs except IEEPA Reciprocal, IEEPA Brazil, and IEEPA Russian Oil
Pharmaceuticals
A general ‘100% tariff rate’ has been announced for branded and patented pharmaceutical product imports.
Information provided on these Section 232 tariffs so far indicates that the action will not apply to generic, unbranded drugs and exemptions will be provided for companies who have ‘broken ground’ on US manufacturing facilities.
No official information has been published yet.
Heavy Trucks
A general ‘25% tariff rate’ has been announced for imports of heavy trucks manufactured outside of the United States. This tariff is designed to protect US truck manufacturers.
No official information has been published yet, although CBP did state during a public call held on October 1st, that further information was expected later that day.
What does the Government Shut Down mean for CBP, Importers, and Customs Brokers?
The U.S. Senate failed to pass a continuing resolution (CR) to keep the federal government funded, so we are now faced with a government shut down starting October 1. Thousands of Government employees will be furloughed, while others will be deemed ‘essential’ and continue to work, albeit without pay.
In a public facing call held October 1, CBP stated that their operations during the Government would not be impacted. The entire agency will remain in place during the shutdown with total continuity of operations. “We are open for business,” as they described it.
There was a robust Q&A session during the call which yielded the following additional information:
Q: Will refunds still be processed?
A: YES
Q: Will checks and ACH still be issued? (note: the actual issuance of processed refund payments has been an issue in the past during other shutdowns)
A: CBP will clarify with office of finance and send an update via messaging through the Office of Trade
- Steel and Aluminum Licensing system will remain operational so please continue to obtain licenses
- CSMS messages will still be sent out as normal
Q: How about Rulings & Fines, Penalties & Forfeiture staff/operations?
A: These departments are operating as normal, no furloughs
Q: Will furloughs of EPA, DEA, and other agencies who are also on the 'front lines' during cargo clearance slow down entry processing in general?
A: Cannot comment on the status of other agencies
Q: How will PGA operations and interactions for entry processing be impacted?
A: Cannot comment on the status of other agencies. If you are experiencing issues, start with your local port contacts and/or port director.
- CTPAT all as normal
- ABI Rep access as normal
Q: During the last government shutdown and associated furlough ITC was out and did not do HTS updates – Is this the case this time around? If so, will we see delays in the implementation of new tariffs?
A: CBP is not currently aware of the impact of the shutdown on ITC this time but will check on that. CBP is moving forward with the Oct 14 date from their side.
- CEEs open, no issues
Q: Will brokers and importers see delays or issues with entry liquidation?
A: No impacts or delays
Q: How long is CBP 'open for business'? What if the shutdown lasts longer than 2 weeks, etc.?
A: Cannot predict that at this time. CBP will host another call if operations or expectations change within their agency.
- Trade outreach webinars will be postponed until funding is restored since they are considered non-essential functions.
Q: Are requests for activations of bond warehouses being impacted by the shutdown?
A: No, staff is processing these on a normal timeline
- CBP is still accepting reports of smuggling, transshipment activities, etc.
- Please direct additional questions to: tradeevents@cbp.dhs.gov
The situation continues to remain fluid. The Laufer Group team will continue to monitor these changes and provide updates on any significant developments.
Please check our INSIGHTS page for previous updates and to find more detail on other active tariffs and open regulatory items.