The President Signs Proclamation Overhauling Section 232 Tariffs on Steel, Aluminum, and Copper

See the Proclamation here.

The Proclamation removes certain products from the scope of the tariffs, as well as adding several dozen new products to the new Section 232 steel, aluminum, and copper lists. Most importantly, the tariff rates now apply to the full customs value of a derivative product, eliminating the controversial metals-content based approach that existed prior to this Proclamation. A new de minimis exception for derivative products also adds a layer of additional complexity.

The new provisions take effect on April 6. Importers of products containing steel, aluminum, or copper should review the Proclamation and its five Annexes carefully and take immediate steps to assess the impact on their supply chains.

This alert summarizes the key changes and their practical implications.

Background

Since 2018, the United States has imposed tariffs on imported steel and aluminum articles under Section 232 of the Trade Expansion Act of 1962 (Section 232). Effective March 2025, President Trump eliminated hundreds of thousands of product-specific exceptions and country-specific exemptions that had accumulated and expanded the scope of the tariffs considerably to include derivative steel and aluminum products. In June 2025, the tariff rates on steel and aluminum were increased to 50% (with the exception of steel and aluminum from the United Kingdom, which was set at 25%). In July 2025, copper was added to the Section 232 tariff regime at the same 50% rate. 

Under the framework prior to this Proclamation, Section 232 tariffs on derivative articles were assessed only on the value of the metal content of the product, and a separate 10% duty under Section 122 of the Trade Act of 1974 applied to the non-metal content under non-stacking rules. As a result, importers could break out and report the value of the metal vs. non-metal content at time of entry and remit the corresponding duties. The April 2 Proclamation completely overhauls this approach with a new, simplified tariff structure that applies to the full customs value of imported products. 

Key Changes

Full-Value Assessment

One of the most significant changes in the Proclamation is the elimination of the prior “metal content” methodology for assessing Section 232 duties on steel and aluminum derivative products. Going forward, Section 232 tariffs on all aluminum, steel, and copper articles and their derivatives will apply to the full customs value of the imported product, regardless of metal content. According to a senior administration official, the prior system had allowed foreign importers to declare artificially low metal values, allegedly undermining the effectiveness of the tariff regime. 

New Tiered Rate Structure

The Proclamation establishes a tiered tariff structure organized across five Annexes, each carrying a different rate.

• Annex I-A (50% rate): Primary steel, aluminum, and copper articles, as well as certain closely related derivatives, are subject to a 50% ad valorem tariff on the full customs value. This category covers 280 tariff classification codes under the Harmonized Tariff Schedule of the United States (HTSUS), consisting of primary metal products in Chapters 72–74 and 76 of the Harmonized Tariff Schedule, as well as products such as structural steel, steel containers, wire, cable, pipe fittings, and fasteners. 

• Annex I-B (25% rate): Certain steel, aluminum, and copper derivatives are subject to a 25% ad valorem tariff on the full customs value. This category includes 410 HTSUS codes, including a broad range of downstream products such as household articles, cutlery, door hardware, certain automotive parts, certain vehicles and trailers, bearings, various machinery, and insulated electrical conductors.

• Annex II (Removed products): Various products are removed entirely from the Section 232 tariff regime. A total of 247 HTSUS codes are no longer subject to Section 232 steel, aluminum, or copper tariffs, covering consumer goods, chemicals, certain engines, certain motor vehicle parts, certain seating components, and furniture parts, among others.

• Annex III (Temporary 15% rate through 2027): Metal-intensive industrial equipment and electrical grid equipment classified under 48 HTSUS codes are subject to a temporary reduced rate through December 31, 2027. Under this provision, the combined Column 1 Most Favored Nation (MFN) duty rate plus the Section 232 rate will total 15%. If a product’s existing Column 1 rate is already at or above 15%, no additional Section 232 duty applies. After 2027, Annex III products will transition to the 25% rate applicable under Annex I-B. 

• Annex IV (15% de minimis threshold): For products outside Chapters 72, 73, 74, and 76 of the HTSUS, the Annex I-B and Annex III tariffs apply only where the weight of the applicable metal is at least 15% of the total weight of the imported article. Products below this de minimis threshold are excluded from those duties. 

Below, we provide a preliminary breakdown of the HTSUS codes listed under each of the annexes described above, including the number of new HTSUS codes.

Reduced Rates for US-Origin Metals and UK Products

The Proclamation provides two notable preferential rate structures.

• US-Origin Metals (10% rate): Whether on Annex I-A, I-B, or III, derivative products manufactured abroad but made entirely with US-origin metals — defined as aluminum that was smelted and cast in the United States, steel that was melted and poured in the United States, or copper that was smelted and cast in the United States — are subject to a reduced rate of 10 %. This new rate structure departs from the previous treatment of US melted and poured steel products and US smelted and cast aluminum products, which had been eligible for a total exemption from the Section 232 tariff.

• UK Products: Products from the United Kingdom receive preferential treatment, reflecting ongoing discussions between the two countries. UK products that would otherwise be subject to the 50% rate face a 25% tariff, and UK products that would otherwise be subject to the 25% rate face a 15% tariff. 

Changes to the Derivatives Inclusion Process

The Proclamation terminates the prior derivatives inclusion processes established under Proclamations 10895, 10896, and 10962. In their place, the Secretary of Commerce and the US Trade Representative are jointly authorized to add new derivative articles to the tariff regime on a rolling basis whenever they determine that imports of those articles threaten to undermine the objectives of the Section 232 program. Notably, this authority explicitly allows metal containers — even those filled with non-metal items — to be brought within the scope of the tariffs. 

Manufacturing Drawback

The Proclamation introduces a narrow manufacturing drawback provision under 19 U.S.C. § 1313(a) and (b) for duties imposed on Annex I-B and Annex III products. However, this relief is limited to products from designated “Trade Agreement Partners” — currently the United Kingdom, the European Union, Japan, the Republic of Korea, Mexico, Canada, and any partner with which the United States concludes a final Agreement on Reciprocal Trade. To qualify, the product must not be subject to an antidumping or countervailing duty (AD/CVD) order, and the metal content must be entirely smelted and cast (or melted and poured) in a Trade Agreement Partner country. No other drawback claims are available with respect to the duties imposed under the Proclamation. 

Foreign Trade Zones

Products subject to the Proclamation that are admitted into a US Foreign Trade Zone on or after the effective date may only enter under “privileged foreign status” under 19 CFR 146.41, unless eligible for admission under “domestic status” as described in 19 CFR 146.43. Products previously admitted under privileged foreign status will be subject to applicable ad valorem rates upon entry for consumption. 

Russia and Non-NTR Countries

Imports of aluminum articles that are the product of Russia, or where any amount of primary aluminum was smelted or cast in Russia, remain subject to the 200% ad valorem rate of duty established in 2023. Products from trading partners with whom the United States does not maintain normal trading relations face a 25% rate under the Annex III temporary provisions. 

Anti-Stacking and Civil Aircraft Exclusions

The Proclamation includes an anti-stacking provision: Goods listed in more than one Annex as articles or derivatives of multiple metals will only be subject to the applicable duty rate once, rather than a combined rate. Additionally, the Proclamation does not alter or supersede actions implementing prior agreements with the United Kingdom, the European Union, Japan, South Korea, or other trading partners to reduce tariffs on certain articles that fall under the World Trade Organization (WTO) Agreement on Trade in Civil Aircraft. 

What This Means for Importers

The Proclamation represents the most significant restructuring of the Section 232 metals tariff regime since its inception. For many importers, the shift to full-value assessment on derivative products will result in a material change in duty exposure — in some cases higher, in others lower, depending on the product and the applicable Annex. The Administration has characterized the new system as a simplification that eliminates the complexities of the prior metal-content-based approach. 

Given the effective date of April 6, importers and affected companies should take the following steps promptly.

• Review Annex Classifications: Determine which of your imported products fall under Annex I-A, I-B, II, III, or IV, and calculate the revised duty rates on the full customs value.

• Assess Metal Content Thresholds: For products outside Chapters 72–74 and 76, determine whether the metal content meets the 15% minimum weight threshold under Annex IV.

• Evaluate US-Origin Metal Sourcing: Consider whether any products qualify for the reduced 10% rate based on US-origin metal sourcing.

• Review Drawback Eligibility: Determine whether any imports from Trade Agreement Partners may qualify for the newly available manufacturing drawback.

• Monitor US Customs and Border Protection (CBP) Guidance: No CBP implementation guidance has been issued to date. We anticipate Cargo Systems Messaging Service messages, Frequently Asked Questions, and potentially interim regulations in the coming days and weeks. 

• Consider Interactions With Other Tariff Regimes: Assess the interplay between the revised Section 232 tariffs and other applicable trade measures, including reciprocal tariffs and AD/CVD orders. 

For more information, please contact the authors of this article or your ArentFox Schiff relationship attorney.