Section 232 15% De Minimis Test: How to Calculate Metal Content for the Derivative Exemption (2026 Guide)

Section 232 15% De Minimis Test: How to Calculate Metal Content for the Derivative Exemption (2026 Guide)

The April 2, 2026 Presidential Proclamation that restructured Section 232 metals tariffs created one provision that almost every importer of mixed-content manufactured goods is now scrambling to understand: products with 15% or less steel, aluminum, or copper content by value are exempt from Section 232 tariffs entirely. For a derivative product that would otherwise pay 25% on its full customs value, qualifying for the de minimis exemption can mean the difference between a viable cost structure and an unprofitable SKU.

The catch is that CBP requires the importer of record to be able to document the metal content calculation on demand, and getting the math wrong — or failing to retain supporting documents — can trigger reclassification, back-duty assessments, and penalties. This guide walks through exactly how the 15% test works, how to gather the underlying data, and how to apply it correctly with three worked examples covering steel, aluminum, and copper derivatives.

What the 15% De Minimis Rule Actually Says

The Annex I-B of the April 2, 2026 proclamation defines derivative articles subject to the new 25% Section 232 tariff. Within that definition, the proclamation carves out an exemption: articles that contain 15% or less steel, aluminum, or copper content by value are not subject to Section 232 duty under the new structure. The carve-out applies to each metal independently — a product that is 14% steel and 14% aluminum still qualifies under each metal's de minimis test individually, but if you sum content across all three metals and exceed 15%, CBP scrutiny intensifies.

The phrase "by value" is critical. The test is not by weight. A product that is 80% steel by weight but only 8% steel by value (because the steel components are commodity stamped pieces while the rest is high-value electronics) qualifies for the exemption. Conversely, a product that is 5% steel by weight but 25% steel by value (think a small precision steel insert in a low-value housing) does not.

CBP defined "value" as the customs value of the metal content at the time of entry — meaning the importer must calculate what portion of the total entered customs value is attributable to the steel, aluminum, or copper components. This is closer to a cost-of-goods-sold style calculation than a physical weight measurement, and it requires actual cost data from the manufacturer or supplier.

Step-by-Step: How to Calculate Metal Content by Value

The 15% calculation follows a four-step process that should be repeated for each Section 232 metal (steel, aluminum, copper) for each finished good HTS classification you import.

Step 1: Identify all metal components in the bill of materials. Pull the manufacturer's BOM for the finished product. List every steel, aluminum, and copper component, including fasteners, brackets, wire, foil, plating layers thicker than trace, and structural elements. Trace amounts of metal in alloys, coatings, and surface treatments below 1% are typically excluded, but document the exclusion rationale.

Step 2: Determine the per-unit cost of each metal component. Get the manufacturer's actual cost for each component — not the retail or transfer price. CBP requires manufacturer-side documentation. For commodity metal components (screws, washers, brackets), this is typically the supplier's invoice price. For custom-fabricated components (a stamped steel housing, a copper coil), it is the manufacturer's standard cost including raw material plus value-add. The rule for the 15% test is that we are measuring only the metal raw material content of each component, not the total component cost. So a stamped steel housing that costs $4 to produce may have only $1 of steel content (the raw coil) — that $1 is what enters the calculation, not the $4.

Step 3: Sum the metal raw material content per unit. Add up the steel raw material values across all steel components in the BOM to get total steel content per unit. Repeat for aluminum and copper. Do not sum across metals — each is tested independently.

Step 4: Divide by total unit customs value. Divide each metal's per-unit raw material content by the total customs value of the finished product per unit. If the result is 15% or less, that metal qualifies for the de minimis exemption. Document the calculation in a worksheet that ties to specific BOM line items, supplier invoices, and the customs entry summary.

Three Worked Examples

Example 1: Stainless Steel Cookware Set (Exempt). An importer brings in an 8-piece stainless steel cookware set from China. Customs value: $40 per set. The set contains five stainless steel pots and pans (raw stainless content per the manufacturer: $4.20), three glass lids with stainless steel rims (raw stainless content: $0.40), and packaging with no metal. Total steel raw material content per set: $4.60. Steel content as percentage of customs value: $4.60 / $40 = 11.5%. Result: Qualifies for the 15% de minimis exemption. No Section 232 duty applies. The importer still owes base MFN duty (typically 6–8% on cookware) plus Section 301 (25% on Chinese cookware) plus Section 122 (10%). But the $10 per set Section 232 derivative tariff that would otherwise apply ($40 × 25%) is eliminated.

Example 2: Copper-Wound Electric Motor (Not Exempt). An importer brings in 1 HP industrial electric motors from Germany. Customs value: $180 per motor. The motor contains 4.5 lbs of copper wire (raw copper content per supplier invoice: $32 at $7.10/lb), 2 lbs of stator steel laminations (raw steel content: $1.80), and a die-cast aluminum housing (raw aluminum content: $4.20). The remainder is electronics, magnets, bearings, and plastic. Copper content: $32 / $180 = 17.8%. Result: Does NOT qualify for the copper de minimis exemption. The motor is now subject to Section 232 derivative tariff at 25% on full customs value: $45 per motor. Steel content ($1.80 / $180 = 1.0%) and aluminum content ($4.20 / $180 = 2.3%) are well below 15% individually — but copper alone disqualifies the entire product. The Section 232 25% applies to the full customs value, not just the copper portion.

Example 3: Aluminum-Framed Solar Panel from India (Borderline — Document Carefully). An importer brings in 400-watt residential solar panels from India. Customs value: $120 per panel. The panel contains an extruded aluminum frame (raw aluminum content per the Indian supplier: $14.40), a small aluminum junction box (raw aluminum content: $1.80), and copper interconnect wire (raw copper content: $2.10). The remainder is glass, silicon cells, polymer backing, and electronics. Aluminum content: ($14.40 + $1.80) / $120 = 13.5%. Copper content: $2.10 / $120 = 1.75%. Result: Borderline qualifies for both exemptions. At 13.5% aluminum, the panel just clears the threshold. The importer should document the calculation thoroughly because a 1.5 percentage point shift in aluminum cost (a single supplier price increase) would push the panel into Section 232 scope at 25% on full customs value — a $30 per panel cost increase. Lock in supplier pricing or build a buffer into the customs value calculation.

What CBP Will Ask For at Audit

CBP has indicated that derivative content claims will be subject to documentation review on a sampled basis through 2026 and 2027. If your entry is selected for review, expect requests for the following.

Manufacturer's bill of materials for each finished good HTS classification, with specific identification of steel, aluminum, and copper components.

Supplier invoices for raw metal feedstock, broken out from any value-add components. CBP wants to see the raw material cost basis, not the finished component cost.

Cost accounting workpapers showing how the importer derived the per-unit raw material content. A spreadsheet with formulas and clear linkage to BOM line items is the standard format.

Tie-out to customs value. The denominator in your 15% calculation must reconcile to the customs value declared on the entry summary. If you imported $100,000 worth of cookware, the sum of per-unit customs values across all units must equal $100,000.

Country-of-melt documentation for the steel or aluminum content. The April 2026 proclamation maintains the smelt-and-cast country-of-origin rule for primary metals. Even for de minimis-exempt derivatives, CBP may request country-of-melt evidence to confirm the metal is not Russian-origin (which faces 200% Section 232 duty regardless of de minimis status).

Common Mistakes That Trigger Section 232 Liability

Confusing total component cost with raw metal content. A stamped steel bracket that costs $12 might contain only $2 of raw steel. Using $12 in the numerator inflates the metal content percentage and can wrongly disqualify a product from the exemption — or, more commonly, lead an importer to over-claim the exemption when in fact the metal content as properly measured exceeds 15%.

Forgetting to sum across all metal components. A product can contain steel screws, an aluminum bracket, and a small steel reinforcing plate. The de minimis test for steel must include both the screws and the plate — not just the dominant component. Missing minor components is one of the most common reasons CBP reclassifies a derivative entry as non-exempt.

Using transfer pricing instead of arms-length cost. Related-party importers must use the arms-length manufacturing cost, not an internal transfer price that may be inflated or deflated for tax purposes. CBP will challenge transfer-priced calculations and recompute the percentage based on the manufacturer's true cost.

Failing to update the calculation when supplier costs change. The 15% threshold is calculated at the time of entry. If a copper supplier raises prices mid-year by 20%, a derivative product that qualified at 13% copper content in March may no longer qualify in October. Importers should rebuild the calculation quarterly or whenever a major input cost shifts.

Treating the test as one-size-fits-all across SKUs. Each finished good HTS classification needs its own calculation. Two products from the same supplier may differ enough in metal content that one qualifies and one does not. Apply the test SKU by SKU.

How to Document the Exemption on Entry

When filing an entry for a product that qualifies for the 15% de minimis exemption, the customs broker should not include the Section 232 Chapter 99 HTS code on the entry summary. The absence of the Chapter 99 code on a product within the Annex I-B scope is the operational signal that the de minimis exemption is being claimed. The supporting calculation does not need to be filed with the entry, but it must be retained in the importer's records and produced on request within 30 days of CBP demand.

For high-value or high-volume derivative imports, many importers are now requesting binding rulings from CBP confirming that a specific product qualifies for the de minimis exemption. A binding ruling provides legal certainty and shifts the burden of proof in any subsequent audit. The downside is the time required (typically 30–90 days) and the public nature of the ruling, which may not be suitable for products with proprietary BOM details.

What If Your Product Falls Above 15% — Mitigation Options

If your initial calculation shows metal content above 15%, several mitigation options can bring you below the threshold or otherwise reduce Section 232 exposure.

Substitute non-Section 232 materials where feasible. Replacing a steel component with engineered plastic, replacing solid copper with copper-clad aluminum (where electrical performance allows), or substituting standard aluminum with magnesium alloy in non-critical applications can pull metal content below the threshold.

Re-source from the UK or claim Annex III industrial equipment status. UK-origin metals receive reduced Section 232 rates (15% on derivatives versus 25%). Industrial and electrical grid equipment qualifying for Annex III pays only 15% through December 2027.

Increase the value-add of non-metal content. If your product has substantial non-metal value-add that is currently undervalued in the customs value (because of transfer pricing, low-margin assembly, or inclusion of services in the import price), recalibrating the customs value upward to reflect arms-length pricing can mathematically reduce the metal content percentage.

File for a Section 232 exclusion. If domestic supply of the specific metal article is insufficient, the Department of Commerce continues to accept exclusion requests. An approved exclusion eliminates Section 232 duty entirely for the specific product and importer.

Use a Foreign Trade Zone for inventory holding. While Section 232 is owed when goods enter the U.S. customs territory, FTZ admission allows importers to defer duty until withdrawal for consumption — and to apply for any future relief or rate reductions that may emerge from court challenges to the April 2026 proclamation.

How This Interacts with Other Tariffs

Section 232 sits within a multi-layer tariff stack in 2026. For products that fall above the 15% threshold and are subject to Section 232 derivative tariff, the order of operations matters. Section 232 applies on full customs value at 25% (or 15% under Annex III, or UK-reduced rates). Section 122 (10% universal tariff) does not stack with Section 232 — products in Section 232 scope are exempt from Section 122 by the February 24, 2026 proclamation. Section 301 (China-specific) does stack with Section 232. Base MFN duty applies to all imports.

For products that fall below the 15% threshold and qualify for the de minimis exemption, Section 232 drops out entirely. Section 122 then applies (10%), as do Section 301 and base MFN. The net effect is that qualifying for the de minimis exemption typically saves around 15 percentage points of total duty (25% Section 232 minus 10% Section 122 that re-attaches), which on a $100,000 shipment is $15,000 in duty savings.

To model your specific landed cost under the new rules, use our Duty & Tariff Calculator and our Tariff Stacking Calculator. For a deeper look at the underlying April 2026 changes, see our companion articles on the Section 232 Steel, Aluminum & Copper Restructure and the Section 232 Copper Tariff Tiered Rates.

The Bottom Line

The 15% de minimis exemption is one of the most consequential provisions in the April 2026 Section 232 restructure. It can save 25% on full customs value for any derivative product that genuinely qualifies — but it requires manufacturer-level documentation, careful HTS classification, and ongoing review as supplier costs shift. Build the calculation now for every derivative SKU you import, retain the workpapers, and treat the exemption as a documented compliance position rather than an assumed default.

If you need help building out a derivative-content compliance file across your SKU portfolio, our team at Cate Freight can run the analysis and coordinate with your customs broker. Use the homepage quote form to start a conversation.

Related Tools

Need help applying these concepts to your operation?

Our tools and insights help logistics professionals optimize freight, warehouse, and duty costs.
All free. No signup required.

Related Articles