New US import tariffs on foreign aluminum and steel: these are the points of attention

New US import tariffs on steel and aluminum

On February 10, 2025, President Trump announced that he would implement a 25% import tax on aluminium and steel products for all countries.[1] The measure, which will take effect on March 12, 2025, will directly affect the European steel and aluminium industry. The announced import duties are intended to protect—among other things—the local American economy, but in exchange have a significant economic impact on foreign companies that trade with the United States. This blog discusses the implications of import duties and what steps you can take if your organisation is faced with increased import duties.

The implications of import duties

An import duty means that one country imposes a tax on specific goods and/or services imported from another country. The economic and geopolitical macro-effects of import duties can be considerable: increased import duties promote the flow of money into the state treasury and protect local industries, but can also be used to exert political influence on another country.

The announced American import duties mean that when an American (legal) person wants to import steel or aluminum from, for example, the Netherlands, they will have to pay extra tax on these products. Because foreign steel and aluminum are expensive as a result from an American perspective, American companies should be encouraged to start making these products themselves. Ultimately, this 'onshoring' should create more employment and thereby strengthen the local economy.[2] Countries targeted by import duties (in this example: the Netherlands), on the other hand, would be hit economically. After all, the increased import duties lead to fewer Dutch aluminum and steel imports on the American market.

Because the affected countries have an economic interest in the removal or at least reduction of the artificially increased import duties, the underlying idea is that the United States could more easily exert political influence over the EU. However, it is also possible that the affected countries could impose their own countermeasures by introducing duties on specific American products and services. In such a case, a so-called 'trade war' would ensue.[3] Ultimately, it is the consumer who often pays the price. After all, importers often have to raise their prices to be able to pay import duties and at the same time keep their business profitable.

Harley-Davidson: the financial risks of trying to avoid import duties

Some companies hope to circumvent import duties by changing the country of origin of their products. By moving the place of production or processing of a product to a location that is not subject to import duties for that specific product, a company could in theory circumvent the (increased) import duty. One company that recently attempted this was Harley-Davidson Europe Ltd (hereafter: 'Harley-Davidson'). In the eyes of the Court of Justice of the European Union (hereafter: 'the CJEU' or 'the Court'), this was unacceptable. The European Court recently put a stop to the international motorcycle company's modus operandi.

In the summer of 2018, during his first term as president, President Trump raised import tariffs on aluminum and steel. In response, the EU in turn raised import duties on motorcycles made in the United States. This increased import duties on the European market from 6% to a total of 31% as of the summer of 2018 and to a total of 56% as of the summer of 2021. In response, the American motorcycle manufacturer Harley-Davidson moved part of its production destined for the European market from the United States to a factory in Thailand. In the eyes of the Court, Harley-Davidson was attempting to avoid the import duties announced by the EU.[4]

Harley-Davidson wanted to be certain that the motorcycles destined for the EU would be given Thai origin instead of American origin after the production site was moved. In this context, it requested that Belgian customs issue a number of binding origin information decisions (BOI). A BOI is a binding written decision from a customs authority that certifies the origin of goods.[5] Initially, the Belgian authorities granted the BOI applications in the summer of 2019.[6]

However, the BOIs were revoked again not much later at the request of the European Commission (hereafter: 'the EC' or 'the Commission'). The Commission was of the opinion that it was economically unjustified for Harley-Davidson to have its products processed and finished in Thailand with the main purpose of avoiding increased import duties. As a result, the EC considered that the motorcycle products should not be eligible for confirmation of Thailand as the country of origin. In this context, the EC referred to the anti-abuse provision in Article 33 of the UCC. This article stipulates, among other things, that if a treatment or processing is carried out in another country or region with the aim of avoiding customs duties, this is considered economically unjustified and the goods are not eligible for confirmation of origin from the country where this treatment or processing took place.[7]

The Court agreed with the Commission's position and ruled that Harley-Davidson had moved its production site with the primary aim of avoiding import duties (also read: ‘EU commercial policy measures'). As a result, the ECJ ruled that the BOI had been rightly revoked, which meant that Harley-Davidson's motorcycle products were still granted United States origin pursuant to Article 33 of the UCC. All in all, this meant that Harley-Davidson was still subject to hefty import duties.[8] 

Practical tips for companies that have to deal with import duties

Finally, this blog offers a number of practical tips for companies that are faced with import duties.

If you want to relocate your place of production when EU commercial policy measures are in effect, it is beneficial if you can demonstrate that you are relocating part of your business operations for reasons such as cost reduction (also read: 'offshoring').[9] You can do this by properly documenting business reasons for relocation, so that you can avoid the application of the anti-abuse provision in Article 33 of the UCC during inspections. This way, you can prevent your company from being wrongly accused of having shifted your production site with the main motive of avoiding higher import duties.

It is also important that you comply with the applicable laws and regulations in and around applying for and obtaining BOI decisions (also read: certificates of origin), so that you can avoid unnecessary and often costly additional tax assessments. Customs legislation is complex. Ploum's Customs, Trade and Logistics team has all the knowledge and expertise to manage your applications for proof of origin and to assist you if you find yourself in a dispute with Dutch customs over the origin of your goods.

Conclusion

In view of the above, the next four years will be a very interesting, but also an exciting time for international trade. The recently announced US import tariffs could become a significant financial burden for aluminum and steel companies in Europe, and many companies facing these trade sanctions will have to deal with customs issues. Ploum's Customs, Trade and Logistics team has extensive experience in conducting customs procedures and has all the knowledge needed to assist your company in this. If you have any questions regarding the above, please feel free to contact Arjan Wolkers (a.wolkers@ploum.nl) or Jikke Biermasz (j.biermasz@ploum.nl).