Section 232 Update: Reduced Tariffs for High-U.S.-Content Steel and Aluminum Goods

If you’re still calculating Section 232 exposure the way you were in early 2026, you’re likely getting it wrong in two directions at once. The April restructuring changed what the duty is assessed against, and a follow-up proclamation in June changed who qualifies for the lowest rate. Importers who haven’t revisited both changes are either overpaying on goods that now qualify for relief, or underpaying because they missed that the duty base itself expanded.

Here’s what actually changed, what qualifies for the reduced rate today, and how to document a claim that holds up under CBP review.

From Metal Content to Full Product Value

Before April 2026, Section 232 was a comparatively simple calculation. A single 50% tariff applied to the value of the aluminum, steel, or copper content in a covered article, and importers only needed to isolate that metal value for duty purposes.

Proclamation 11021, signed April 2, 2026 and effective for goods entered on or after April 6, 2026, replaced that with a full-value system. The duty is now assessed against the entire customs value of the article, not just the metal portion, and covered products were sorted into a tiered structure of rates rather than one flat number. For most derivative products, this change alone increased effective duty exposure, since the base the rate applied to got larger even where the rate itself didn’t change.

The Current Rate Structure

As of this writing, Section 232 metals tariffs fall into four tiers:

50% tariff applies to raw and primary steel, aluminum, and copper products, largely the goods classified in Chapter 72 and most of Chapters 73, 74, and 76.

25% tariff applies to derivative products substantially made of steel, aluminum, or copper, covering a broad range of downstream manufactured goods from machinery to electrical equipment to construction materials.

15% capped rate (temporary, through December 31, 2027) applies to specified metal-intensive industrial equipment and electrical grid equipment, calculated as the difference between 15% and the general MFN rate of duty, with a floor of 0%. This category was expanded in June 2026 to include agricultural equipment and residential HVAC systems that had previously been taxed at the standard 25% derivative rate.

10% tariff applies to derivative products manufactured abroad that meet a U.S.-origin metal content threshold, discussed below. This is the rate most relevant to importers actively working to reduce their exposure through supply chain decisions rather than product category alone.

Articles where the applicable metal makes up less than 15% of total product weight are excluded from Section 232 entirely, regardless of category.

The High-U.S.-Content Threshold, and Why It Just Got Easier to Reach

The 10% rate exists for one purpose: to reward derivative products manufactured abroad using U.S.-sourced steel, aluminum, or copper, rather than penalizing them at the same rate as products using foreign metal throughout.

When this category was introduced in the April proclamation, qualifying required the product’s applicable metal content to be at least 95% U.S.-sourced, smelted or cast domestically. That threshold proved difficult for many manufacturers to clear in practice, since even products built primarily from U.S. metal often incorporate a small percentage of foreign-sourced components or alloying material.

A follow-up proclamation signed June 1, 2026, effective for goods entered on or after June 8, 2026, lowered that threshold from 95% to 85%. This is the change that matters most for importers evaluating whether a product now qualifies that didn’t before. A derivative article manufactured overseas using steel or aluminum that is at least 85% smelted and cast in the United States now qualifies for the 10% rate instead of the 25% (or in some cases 50%) rate that would otherwise apply.

The same June proclamation also created a new temporary rate category, Annex I-C, for mobile industrial equipment and machinery, with a standard rate of 25% but built-in reductions for USMCA-qualifying goods from Canada and Mexico, for goods from countries with qualifying trade agreements, and for products meeting the 85% U.S.-melted-or-smelted metal threshold. Importers of qualifying equipment should evaluate whether Annex I-C treatment produces a better outcome than the general derivative rate.

What Counts as U.S.-Sourced for This Purpose

The threshold isn’t about final assembly location or brand origin. It’s specifically about where the metal itself was smelted or cast, sometimes described as the melt-and-pour standard for steel and the smelt-and-cast standard for aluminum. A product assembled entirely in the United States using imported raw steel does not qualify. A product assembled overseas using steel that was melted and poured domestically, and then exported for finishing, can qualify, provided the U.S.-origin share of the applicable metal content meets the 85% threshold.

This distinction catches importers who assume “American steel” or “American aluminum” is a marketing claim rather than a documented origin standard. It isn’t. CBP expects supporting documentation tracing the metal back to its melt or smelt origin, not a supplier’s general assurance that the material is domestic.

Documenting a High-U.S.-Content Claim

Because this rate depends on a specific origin threshold rather than a product category, the burden of proof sits with the importer. A defensible claim generally requires:

• Mill certificates or equivalent documentation identifying the smelt or cast origin of the metal used
• A bill of materials showing the proportion of U.S.-origin versus foreign-origin metal by weight
• Supplier certifications specific to the melt-and-pour or smelt-and-cast standard, not general country-of-origin statements
• Records sufficient to demonstrate the 85% threshold is met on a per-shipment basis, since content ratios can shift between production runs

Importers who claim the 10% rate without this documentation in hand at the time of entry are exposed to reclassification, back duties at the higher applicable rate, and potential penalties if CBP determines the claim wasn’t supportable.

How This Interacts With Other Tariff Programs

A few interaction rules are worth confirming before assuming a rate applies:

Goods already subject to Section 232 automotive tariffs are exempt from the steel and aluminum tariffs, to avoid stacking duties on the same product twice. The temporary global tariff imposed under Section 122 of the Trade Act of 1974 does not apply to products already covered by Section 232. And where a product qualifies under both a country-specific trade agreement rate and the 85% U.S.-content threshold, importers should confirm which produces the lower effective rate rather than assuming the general derivative rate applies by default.

A Practical Checklist Before Your Next Entry

• Confirm which annex your product falls into under the current structure, not the pre-April 2026 single-rate system.
• Recalculate landed cost using full product value as the duty base, not metal content value alone.
• If your supply chain includes any U.S.-melted or smelted metal, evaluate whether the 85% threshold is reachable with a documented bill of materials.
• Collect mill certificates and melt-and-pour or smelt-and-cast documentation before the shipment is entered, not after CBP requests it.
• Check whether Annex I-C or a trade-agreement-specific rate produces a better outcome than the standard derivative rate, particularly for mobile industrial equipment.
• Reconfirm exclusions: articles under 15% metal content by weight, and goods already taxed under Section 232 automotive tariffs, don’t belong in this calculation at all.

Frequently Asked Questions

What changed about how Section 232 tariffs are calculated? As of April 6, 2026, the tariff is assessed on the full customs value of the covered article, not just the value of its steel, aluminum, or copper content.

What’s the current threshold to qualify for the reduced 10% rate? As of June 8, 2026, a derivative product qualifies if at least 85% of its applicable metal content was smelted or cast in the United States, down from the original 95% threshold set in April.

Does final assembly in the U.S. qualify a product for the reduced rate? No. The threshold is based on where the metal itself was melted, smelted, or cast, not where the finished product was assembled.

Are any products excluded from Section 232 metals tariffs entirely? Yes. Articles where the applicable metal makes up less than 15% of total product weight by weight are excluded, regardless of category.

Section 232 exposure now depends on documentation as much as classification, and a claim that isn’t supportable at entry can cost more in back duties and penalties than the tariff itself would have. Clearit USA’s customs brokerage services can review your current product mix against the April and June 2026 annex structure, confirm whether your supply chain supports a high-U.S.-content claim, and help you build the documentation to defend it.