Importing Steel

Here’s you can see a guide covers licensing, tariffs, sourcing, customs clearance, and compliance for steel imports. Whether you’re importing carbon steel, stainless steel, or specialty alloys, this resource provides actionable insights to navigate U.S. regulations efficiently.

Do You Need an Import License?

Most steel products do not require a license, but exceptions include:

• Defense-related steel (ITAR-controlled, e.g., armor plate)
• Controlled alloys (e.g., nickel-based superalloys for aerospace)

Agencies

• CBP (Customs & Border Protection) – General import oversight
• DOC/BIS (Bureau of Industry & Security) – Dual-use/defense items
• DOT (Department of Transportation) – Steel for infrastructure

Documentation

• Commercial Invoice
• Bill of Lading
• Mill Test Certificates (MTCs) – Critical for quality verification
• Certificate of Origin (For FTA claims)

Customs Clearance Process for Steel Imports: A Detailed Guide

The process of importing steel into the United States is a multi-stage procedure that requires meticulous attention to detail, adherence to strict timelines, and compliance with various regulations from U.S. Customs and Border Protection (CBP) and partner agencies.

Step 1: Accurate Product Classification

Before any paperwork is filed, the imported steel must be accurately classified.

Determine the correct Harmonized Tariff Schedule of the United States (HTSUS) code for your product. For steel, this often falls under Chapter 72. For example, hot-rolled iron or non-alloy steel in coils is typically classified under HTSUS 7208.51.0000 or 7208.52.0000, depending on thickness and width.

Importance: The HTSUS code dictates the rate of duty, informs whether the goods are subject to anti-dumping/countervailing duties (AD/CVD), and determines if they are covered by Section 232 tariffs on steel. An incorrect classification can lead to severe penalties, shipment delays, and payment of back duties.

Step 2: Importer Security Filing (ISF 10+2)

This is a mandatory security requirement for all ocean shipments.

The importer (or their authorized agent) must electronically file the ISF no later than 24 hours before the cargo is laden aboard a vessel destined for the U.S. Souerce: www.cbp.gov/border-security/ports-entry/cargo-security/importer-security-filing-102

Filing Content: The ISF consists of 10 data elements provided by the importer, including:

• Manufacturer (or supplier) name and address
• Seller name and address
• Buyer name and address
• Ship-to name and address
• Container stuffing location
• Consolidator (stuffer) name and address
• Importer of record number (e.g., IRS number, EIN)
• Consignee number
• Country of origin of the goods
• Commodity HTSUS number (at the 6-digit level)

Consequence of Non-Compliance: Failure to file, late filing, or inaccurate filing can result in significant monetary penalties (up to $5,000 per violation) and holds placed on the cargo, preventing its release.

Step 3: Entry Filing and Submission

Once the vessel arrives, the formal entry process begins. This is the official request to CBP to allow the imported goods into the U.S. commerce.

The importer of record or their licensed customs broker must file an entry summary, primarily using CBP Form 3461, through the Automated Commercial Environment (ACE) portal.

Required Data: The entry filing includes detailed information such as:

• The final, 10-digit HTSUS classification
• Detailed product description
• Value of the merchandise (for appraisal)
• Quantity and shipping information
• Applicable duties and taxes
• The importer of record number
• The surery bond information to guarantee payment of duties

This filing must be submitted within 15 calendar days of the shipment’s arrival at a U.S. port of entry.

Step 4: Payment of Estimated Duties and Taxes

Upon submission of the entry, the importer is obligated to pay all estimated duties, taxes, and fees. For steel, this is a complex calculation.

Components of Payment:

• Normal Trade Relations (NTR) Duty: The standard duty rate based on the HTSUS code and country of origin.
• Section 232 Tariffs: An additional 25% tariff on most steel articles imported from most countries (certain countries have quotas or exemptions). This is a critical cost factor.
• Anti-Dumping (AD) and Countervailing (CVD) Duties: These are punitive tariffs imposed on specific steel products from specific countries found to be sold in the U.S. at unfairly low prices (dumping) or benefited from foreign government subsidies (countervailing). These rates can be extraordinarily high, often exceeding 100%. It is imperative to check the current AD/CVD orders from the Department of Commerce.

Payment is made to CBP, typically by the broker on the importer’s behalf, and is a requirement for the release of the goods.

Step 5: CBP Examination and Document Review

CBP reviews all submitted documentation and may perform a physical examination of the shipment to ensure compliance.

Document Review: CBP auditors verify the accuracy of the entry documentation, including the HTSUS classification, declared value, and country of origin.

Physical Examination: CBP may select a shipment for a physical examination. For steel, the primary purpose is often to verify the Mill Test Certificate (MTC). The MTC is a quality assurance document from the steel mill that provides chemical composition and mechanical properties, which prove the grade and specification of the steel. This examination is crucial to:

• Confirm the product matches its HTSUS classification.
• Verify the country of origin declared on the paperwork.
• Ensure the goods are not misrepresented to evade Section 232 or AD/CVD duties.

If selected, the examination will cause a delay. Once CBP is satisfied, the shipment receives a release notification.

Final Step: Cargo Release and Post-Entry Amendment

After all requirements are met, CBP issues a release notification to the importer and the carrier.

Cargo Release: This authorization allows the importer to take possession of the goods from the port or warehouse and move them to their final destination.

Post-Entry Process: The entry is not finally liquidated (closed) by CBP immediately. CBP has up to 314 days to review the entry in detail and liquidate it. If discrepancies are found, a bill for additional duties will be issued. Conversely, if an overpayment was made, the importer can file a post-summary correction to claim a refund. Maintaining all records, including the commercial invoice, bill of lading, and the MTC, for at least five years is a legal requirement for this eventuality.

Detailed Analysis of Major Compliance Risks

Risk of Product Misclassification

Incorrectly classifying your steel products under the Harmonized Tariff Schedule (HTS) is a critical and costly error. The HTS code determines the rate of duty, eligibility for trade programs, and the applicability of special tariffs.

Consequences of Misclassification: Submitting an incorrect HS code to U.S. Customs and Border Protection (CBP) is a violation. If discovered during an audit or review, the importer becomes liable for back duties and taxes. Furthermore, CBP can impose substantial monetary penalties. These penalties can reach up to ten times the value of the duties originally owed on the misclassified goods, which can be a devastating financial blow.

Root Causes: Misclassification often occurs due to the highly technical nature of steel products. Factors like slight variations in alloy composition, carbon content, shape (e.g., coil vs. sheet), and dimensions can drastically change the appropriate HTS code. Relying on a supplier’s classification without independent verification is a common pitfall.

Risk of Missing Mill Test Certificates (MTCs)

A Mill Test Certificate is a quality assurance document issued by the steel manufacturer that certifies a product’s chemical and physical properties and confirms it meets required standards.

Consequences of Missing MTCs: For steel imports, MTCs are not optional; they are mandatory. CBP and other governing bodies frequently demand them at ports of entry. Without a valid and accurate MTC, your shipment will be held, leading to significant demurrage and storage charges that accumulate daily. This delay disrupts supply chains and can lead to production stoppages for your customers.

Key Challenge: The responsibility for providing the MTC falls on the importer of record. Many importers mistakenly assume their foreign supplier will handle this seamlessly. However, certificates can be lost, forgotten, or contain errors that render them invalid, directly resulting in port detentions.

Risk of Violating the Uyghur Forced Labor Prevention Act (UFLPA)

The UFLPA is a stringent U.S. law that creates a “rebuttable presumption” that all goods mined, produced, or manufactured wholly or in part in China’s Xinjiang Uyghur Autonomous Region (XUAR) are made with forced labor. These goods are therefore prohibited from entering the United States.

Consequences of UFLPA Violations: Any steel shipment suspected of having a supply chain link to the XUAR will be detained by CBP. The importer then bears the heavy burden of proof to provide clear and compelling evidence that the goods were not produced with forced labor. The evidentiary standard is exceptionally high. Most detentions lead to full seizures and forfeiture of the cargo, representing a total loss.

Complexity of Compliance: The risk is not limited to direct imports from China. Steel products from third countries (e.g., Vietnam, Malaysia, India) may contain Chinese-origin raw materials (e.g., billets, pig iron) from Xinjiang. Tracing the origin of raw materials through multiple tiers of the supply chain is the core challenge.

U.S. Steel Import Tariffs Explained

1. Section 232 Tariffs (National Security)

The primary purpose of the Section 232 tariffs on steel is to protect the long-term viability of the U.S. steel industry. The investigation concluded that excessive imports of cheap foreign steel threatened to impair national security by eroding the domestic industrial base necessary for producing critical defense equipment, infrastructure, and other essential goods.

Effective Date and Authority

These tariffs were implemented effective March 23, 2018, under the authority of Section 232 of the Trade Expansion Act of 1962. This law allows the President to adjust imports through tariffs if an investigation by the Department of Commerce confirms they threaten national security.

Tariff Rate and Product Coverage

A uniform tariff rate of 25% is applied to most imported steel products. This broad tariff covers the two main categories of steel:

• Carbon Steel: Includes common products like hot-rolled coil (HRC), sheet, plate, rebar, structural sections, and pipe and tube.
• Alloy Steel: Includes stainless steel, tool steel, and other steels with added elements like chromium or nickel to enhance properties.

Some highly specific, non-mass-produced specialty steels (e.g., certain grades required for nuclear applications) may be eligible for product-specific exclusions.

Country Exemptions

While the tariff officially applies to imports from all countries, certain nations have negotiated alternatives to the 25% tariff, typically in the form of import quotas. These countries include Argentina, Australia, Brazil, Japan, Mexico, and South Korea, among others. Imports from these countries that exceed their negotiated quota volumes are subject to the 25% duty.

Duty Calculation

The 25% tariff is calculated based on the customs value of the imported merchandise, which is typically the price paid for the goods plus the cost of international freight and insurance to the U.S. port of entry.

Example Breakdown:
A shipment of German steel with a product value of $95,000, freight cost of $4,000, and insurance of $1,000 has a total customs value of $100,000.

The Section 232 duty owed to U.S. Customs would be:
$100,000 × 0.25 = $25,000

This duty is paid in addition to any regular import duties (Normal Trade Relations tariff) and potential Antidumping/Countervailing (AD/CVD) duties.

2. Section 301 Tariffs (China-Specific)

Section 301 tariffs are fundamentally different from Section 232. Their primary purpose is not national security but to counter China’s unfair trade practices. These practices include forced technology transfer, intellectual property theft, and extensive state subsidies that give Chinese companies an artificial price advantage in global markets. The goal is to pressure China to reform its trade policies and level the playing field for U.S. industries.

Effective Date and Evolution

The initial Section 301 tariffs on Chinese goods were implemented in 2018. In May 2024, the Biden administration significantly expanded these tariffs, adding new sectors and increasing rates on existing ones, specifically targeting the steel and aluminum industries with strategic precision.

Tariff Rates and Product Coverage

The key feature of Section 301 is that its tariffs stack on top of other duties.

• Base Rate: A 25% tariff is applied on a wide range of Chinese-origin steel products.
• Total Effective Tariff: When combined with the standard 25% Section 232 tariff, the total duty on most Chinese steel reaches 50%.

The tariffs specifically target finished steel products to protect downstream U.S. manufacturers. Key targeted products include stainless steel (HS heading 7219), various steel pipes and tubes (HS 7304-7306), and tool steel (HS 7228).

The 2024 expansion added 25% tariffs on derivative products like steel nails, wires, and certain EV battery components with steel casings, closing loopholes used to circumvent earlier tariffs.

Duty Calculation

The tariffs are calculated separately on the same customs value (product value + freight + insurance) and then added together.

Example Calculation:
A shipment of Chinese steel pipe with a customs value of $100,000 would face:

• Section 232 Duty: $100,000 × 25% = $25,000
• Section 301 Duty: $100,000 × 25% = $25,000
• Total Duty Owed: $25,000 + $25,000 = $50,000

This does not include any standard import duties or potential Antidumping/Countervailing (AD/CVD) duties, which would add even more cost.

Impact on the Steel Industry

U.S. Market Effects

• Domestic prices: 20-30% higher than global benchmarks
• Production boost: U.S. mills operating at 83% capacity (vs 72% pre-tariffs)
• Import shifts: Canada/Mexico now supply 36% of U.S. imports (vs 25% in 2017)

Global Trade Shifts

• China’s exports to U.S. dropped 85% since 2018
• Vietnam/Thailand face new scrutiny for transshipment
• EU retaliatory tariffs on U.S. products (e.g., bourbon, motorcycles)

Strategies to Reduce Tariff Costs

Sourcing Alternatives

Strategy	Savings	Risk
Buy from Canada/Mexico	25% (vs Sec 232)	Limited specialty steel
Use USMCA Cert of Origin	25% (Sec 232)	Strict value-content rules
Import semi-finished steel	Lower AD/CVD	Higher processing costs

Legal Avenues

• Exclusion Requests (For unique steel grades)
• Customs Mitigation (HS code optimization)
• Foreign Trade Zones (FTZs) (Defer duty payments)

Steel Import Licensing and Customs Procedures

Importing steel into the United States involves navigating a complex framework of licensing and regulatory requirements designed to enforce trade laws. Understanding these procedures is critical for ensuring compliance and avoiding costly delays or penalties.

General Import License

For the majority of steel products, a general import license is not required. The act of importing itself, facilitated by filing the necessary customs entry documents with U.S. Customs and Border Protection (CBP), serves as the primary authorization.

However, certain specialized steel products are subject to additional controls. These exceptions typically involve steel with specific compositions (e.g., high-grade alloys) or intended for sensitive end-uses. The most common requirement is for defense-related applications. Importers must obtain a permit from the Department of State’s Directorate of Defense Trade Controls (DDTC) under the International Traffic in Arms Regulations (ITAR) if the steel is specifically designed or modified for military use.

Steel Import Monitoring (SIM) License

A key requirement for many steel importers is the Steel Import Monitoring license.

• Purpose: The SIM program is administered by the U.S. Department of Commerce (DOC). Its primary function is not to deny entry but to serve as an early warning system. By requiring licenses for specific products before they are shipped, the DOC can monitor import trends in near-real-time. This data is vital for the effective enforcement of Anti-Dumping and Countervailing Duty (AD/CVD) orders, helping domestic industries and investigators identify potential surges of unfairly traded steel.
• Coverage: The requirement applies to a broad range of steel products falling under Chapters 72 and 73 of the Harmonized Tariff Schedule (HTS).
• Application Process: Licenses are obtained for free through the DOC’s online Steel Import Monitoring and Analysis (SIMA) system. The application requires detailed information about the product, its value, quantity, country of origin, and country of melt and pour.
• Timing: The critical rule is that the license number must be obtained before the cargo is shipped to the United States. This license number must then be referenced on the customs entry documents filed with CBP upon arrival. It is not a license to clear customs, but a mandatory data requirement for tracking.

Anti-Dumping & Countervailing Duties (AD/CVD)

AD/CVD orders are among the most significant cost factors and compliance challenges for steel importers.

• Nature of Duties: These are not licenses but financial penalties imposed on specific products from specific countries found to be sold in the U.S. at unfairly low prices (dumping) or benefiting from unfair foreign government subsidies (countervailing).
• Scope: Hundreds of AD/CVD orders are active on steel products from numerous countries, including China, the European Union, India, South Korea, and Turkey. Each order applies to a very specific product and country combination.
• Importer Responsibility: It is the importer’s legal obligation to determine if their goods are subject to an AD/CVD order. This requires consulting the lists maintained by the Department of Commerce (DOC) and the U.S. International Trade Commission (USITC).
• Financial Impact: If applicable, these duties are paid in addition to all other normal duties and tariffs at the time of entry. They can be substantial, often exceeding 100% of the product’s value.

Section 232 Steel Tariffs

The Section 232 measure is a national security-based tariff that operates separately from licensing.

• Application: A blanket 25% tariff is imposed on almost all steel imports, with exemptions for certain countries that have negotiated quotas (e.g., Argentina, Australia, Brazil, South Korea).
• Exclusion Process: While there is no license for the tariff itself, importers can apply for an exemption if they can demonstrate that a specific steel product is not available in sufficient quantity or quality from U.S. producers. These applications are submitted to the DOC via its 232 Exclusions Portal. If an exclusion is granted, the importer can import that product without paying the 25% tariff, even if it originates from a non-exempt country.
• Importer Action: For non-excluded products from non-exempt countries, the importer must simply calculate and pay the 25% tariff, based on the product’s customs value, at the time of entry.

 

Customs Procedures for Steel Imports

Entry Filing (via ACE System)

All imports must be declared to CBP via the Automated Commercial Environment (ACE).

Required Documents:

• Commercial Invoice (with value, origin, and product details).
• Bill of Lading (BOL) or Air Waybill.
• Packing List.
• Certificate of Origin (if claiming FTA benefits, e.g., USMCA).
• Steel Import License (if applicable under SIMA).
• Importer Security Filing (ISF-10) for ocean shipments (filed 24 hrs before loading).

Customs Bond Requirement

Mandatory for all commercial steel imports.

Types of Bonds:

• Single-Entry Bond (for one shipment).
• Continuous Bond (for frequent importers, covers multiple shipments).

Bond Amount: Typically 10% of estimated annual duties/taxes.

Duties & Tariffs

HTS Classification: Must classify steel under the correct Harmonized Tariff Schedule (HTS) code (e.g., 7206.10 for iron/steel ingots).

Applicable Duties:

• Most Favored Nation (MFN) rates (varies by product).
• Section 232 tariffs (25%) (unless excluded).
• AD/CVD duties (additional, country-specific).

CBP Examination and Release

• Possible Inspection: CBP may examine shipments for compliance.
• Duty Payment: Must be paid before release (unless deferred via a continuous bond).
• Customs Clearance: Once approved, shipment is released.

Post-Entry Compliance

• Recordkeeping: Maintain import documents for 5 years.
• Reconciliation (if applicable): Adjustments to value or classification can be made post-entry.

Penalties for Non-Compliance

• Fines for incorrect classification or undervaluation.
• Seizure of goods if AD/CVD or licensing requirements are violated.
• Loss of importing privileges for repeated violations.

 

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