Customs Increases Steel Import Enforcement
U.S. Customs is reportedly stepping up manifest enforcement for steel and derivative products, increasing compliance burdens for manufacturers. The heightened scrutiny focuses on Section 232 requirements, including the mandatory reporting of the “country of melt and pour” for all covered steel goods, even from Mexico. Inaccurate reporting can lead to fines and shipment delays.
- The "country of melt and pour" requirement is a response to concerns about transshipment, where steel from countries facing tariffs (like China) is minimally processed in a third country (like Mexico or Canada) to circumvent duties. This enforcement aims to ensure tariffs are applied based on the original source of the raw steel. - Section 232 of the Trade Expansion Act of 1962 grants the President authority to impose tariffs on imports deemed a threat to national security. The Trump administration initiated these steel and aluminum tariffs in 2018, citing the need to protect domestic production capacity for defense and critical infrastructure. - In June 2025, the Section 232 tariffs on many steel and aluminum imports were increased from 25% to 50%, significantly raising the cost of non-compliance for manufacturers. This increase also applies to "derivative" products, which are finished goods containing steel or aluminum. - Failure to provide the required melt and pour documentation can result in significant financial penalties. For instance, if the country of origin for aluminum is unknown, importers may face a 200% duty, the same rate applied to Russian aluminum. U.S. Customs and Border Protection (CBP) has also been directed to assess maximum penalties for misclassification of steel articles without considering mitigating factors. - The increased administrative burden is a significant challenge for manufacturers, who must now dedicate more resources to tracing the origin of their steel and providing detailed documentation. This includes obtaining and verifying mill test certificates, which can be difficult in complex, multi-tiered supply chains. - Geopolitically, the enforcement of Section 232 is intertwined with broader trade tensions, particularly with China, which has been accused of creating global overcapacity through state-subsidized steel production. The tariffs are intended to counter these practices and encourage a shift to more resilient and diversified supply chains for critical materials. - For internal audit functions, this heightened enforcement necessitates a proactive approach to trade compliance. Auditors are increasingly expected to assess supply chain resilience, verify the accuracy of origin documentation, and ensure contingency plans are in place to mitigate the risks of shipment delays and financial penalties.
