CMI Tariff Calculation Update & Information
Dear Valued Customer,
It has come to our attention that a number of our nail competitors may be utilizing an incorrect calculation for steel nail tariff costs. They are attempting to segregate and apply the tariff only to the steel portion of the finished product, excluding costs associated with manufacturing the nails, galvanizing, labor, packaging, and profit. Some may even be using just the cost of the steel coil (FOB their supplier) as their basis of calculation, this is also incorrect.
Our Customs legal counsel has consulted with Customs and Border Protection (CBP) Enforcement, who have clearly stated that these methods are inaccurate.
Key Compliance Facts
The U.S. Customs and Border Protection (CBP) directive mandates that for finished steel articles (like steel nails without any non-steel or plastic components):
- The tariff must be calculated based on the full value the importer paid for the finished, imported article.
- Surface coatings, such as zinc/galvanizing, are not considered a separate, non-steel component and must be included in the steel content value.
- The only acceptable exclusion is for costs clearly attributable to non-steel components, such as plastic collating material or plastic caps and associated costs.
The penalty for misapplying the tariff rate can be up to three times the actual tariff amount due.
Risk to Your Supply Chain
We believe that companies using this incorrect calculation are in violation of the current Tariff Directive. While we do not assume intent to defraud, this misinterpretation will likely lead to an investigation and enforcement actions. We are advising our customers of this because it places all improperly valued shipments at risk. If CBP decides to seize material, it could cause significant interruption to your supply chain and result in severe financial penalties. Additionally, we estimate the difference in cost of this miscalculation, for a simple coil roofing product, could be approximately $2.00 to $2.50 more per box.
CMI will continue our long-standing practice of accurate and compliant tariff reporting, ensuring that neither our company nor our customers are exposed to these substantial risks.
Please contact us if you would like a detailed explanation of this directive and its potential impact.
Continental Materials, Inc. (CMI) is a leading national supplier of roofing system component materials. As the largest importer of roofing fasteners into the US, our roofing fasteners go on 2.2 million homes every year and our construction fasteners frame another quarter million homes. CMI is the exclusive supplier of top-of-the-line SecureGrip synthetic underlayments in both mechanically attached and self-adhered formats. And of course we’re known for our “No Smell” BUR asphalt with its WeatherSeal protective packaging and eco-friendly woodfiber roof insulation. CMI’s focus is on bringing Quality, Service, and Value to our customers and we’ve been doing just that since 1958.
For more information on CMI products, call (215) 884-4930, visit our website or contact your local CMI Sales Representative.