Section 232 Tariff Changes Could Raise Costs for Importers of Steel, Aluminum, and Copper Products

Impact of April 2, 2026, Proclamation may be more significant than expected

The April 2, 2026, Proclamation, effective for covered goods entered on or after April 6, 2026, significantly reshapes how Section 232 duties apply to steel, aluminum, copper, and derivative products. For many importers, it changes the duty base on these products, broadens the scope of affected products, and increases the importance of origin and composition analysis.

For businesses that import finished goods, industrial equipment, components, or mixed-material products, the impact could be much broader than prior Section 232 rounds.

Tariffs now apply to the full customs value of many covered imports

The most significant change is the elimination of the prior “metal content” methodology for covered derivative products.

Previously, tariffs on certain derivative articles were assessed only on the value of the actual steel or aluminum content. Under the new rules, duties apply to the full customs value of the imported article if the product falls within scope.

That change could materially increase duty exposure for businesses importing higher-value finished goods, even where metal makes up only a small portion of the product.

New rules create ‘layered’ tariff structure

The Proclamation organizes products into five annexes with different duty outcomes, adding layers and emphasizing classification.

• Annex I-A (50%): Primary metals and closely related derivatives, including structural steel, pipe fittings, and fasteners
• Annex I-B (25%): Many downstream products, including household goods, automotive parts, machinery, and insulated electrical conductors
• Annex II: Roughly 247 HTSUS codes excluded from Section 232 coverage
• Annex III (temporary 15%): Certain metal-intensive industrial and electrical grid equipment through December 31, 2027, before transitioning to 25%

Importers must determine whether a product falls into a category that changes how Section 232 rules apply.

Origin and sourcing rules now matter even more

For certain derivative products made abroad using qualifying U.S.-origin metal, the applicable rate is now 10%, replacing what had previously been a full exemption.

Certain products may qualify where at least 95% of the relevant aluminum was smelted and cast in the United States, at least 95% of the relevant steel was melted and poured in the United States, or at least 95% of the relevant copper was smelted and cast in the United States, depending on the product category.

The United Kingdom also receives more favorable treatment, with lower rates available for qualifying products that meet the applicable sourcing requirements.

Russia, however, remains subject to especially severe treatment for aluminum. Aluminum articles and derivative aluminum articles that are the product of Russia, or that use Russian-smelted or Russian-cast primary aluminum, continue to face a 200% ad valorem rate.

List of covered derivative products may continue to grow

Under the new framework, the Secretary of Commerce and the U.S. Trade Representative have the authority to add derivative articles on a rolling basis. That means businesses should not assume that a product outside the current annexes will stay outside the scope indefinitely, and should monitor continuously.

This is especially important for importers of mixed-material products, industrial assemblies, and packaging or container-related goods. Even companies that do not think of themselves as traditional metal importers may need a more formal process for monitoring Section 232 developments.

Limited drawback relief may provide planning opportunities

The Proclamation introduces a narrow manufacturing drawback opportunity for certain importers.

Manufacturing drawback claims under 19 U.S.C. 1313(a) and (b) are available where the applicable conditions are satisfied. However, the relief is limited to certain Annex I-B and Annex III products and only where the goods originate from Trade Agreement Partners and meet specific smelting or pouring requirements.

For qualifying businesses, this may create a planning opportunity, but it is unlikely to offset broader exposure on its own.

What businesses should do now

Companies affected by these changes should begin with a targeted review of their import profiles and supporting documentation, including:

• Confirming whether imported goods fall within one of the new annex categories 
• Reassessing customs valuation procedures in light of the move to full-value assessment 
• Analyzing product composition to determine whether the 15% de minimis weight threshold may apply 
• Validating melt-and-pour and smelt-and-cast documentation for steel, aluminum, and copper inputs 
• Reviewing whether any preferential UK or US-origin metal treatment may be available 
• Evaluating drawback opportunities for qualifying products and trade partner sourcing structures 

Reporting requirements remain critical, including continued reporting of countries of melt and pour for steel and smelt and cast for aluminum, with future copper reporting to follow for certain classifications.

If your business is trying to make sense of both the latest Section 232 changes and the broader uncertainty surrounding tariffs and refunds, now is the time to take a fresh look at your exposure. UHY can help you assess the impact, identify planning opportunities, and navigate the next steps for classification, sourcing, and compliance.

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