Section 232 Steel and Aluminum Tariffs: Current Rates and Exemptions
## Section 232 Steel and Aluminum Tariffs: Current Rates and Exemptions
Section 232 of the Trade Expansion Act of 1962 grants the President authority to impose tariffs on imports deemed critical to national defense. In 2018, this provision was invoked to justify tariffs on steel and aluminum imports. As of 2026, those tariffs have been escalated to 50% on both metals, with no country exemptions—including Canada and Mexico under USMCA.
Understanding Section 232 coverage, the concept of derivative articles, and your options for exclusion or mitigation is essential for industries reliant on imported steel and aluminum.
What is Section 232?
Section 232 is part of the Trade Expansion Act of 1962 and allows the President to impose tariffs or quotas on any article he determines is imported in such quantities as to threaten national security. This is an extraordinarily broad authority—it does not require Congressional approval and does not require proof of dumping or unfair practices.
The national security justification has been controversial. Critics argue that steel and aluminum used in consumer products (like beverage cans or sports equipment) have no genuine defense relevance. Nonetheless, the tariffs have remained in place and, as of 2026, have escalated.
Original and Current Rates
2018 Implementation: - Steel: 25% tariff - Aluminum: 10% tariff
2026 Status: - Steel: 50% tariff (doubled) - Aluminum: 50% tariff (increased 5x) - Effective Date: The escalation occurred in 2025 and remains in effect in 2026 - Country Coverage: Worldwide (no exemptions—including Canada, Mexico, EU, UK, Japan, Korea, Taiwan)
This is a dramatic increase from the original rates. An importer of steel valves, for example, now pays 50% duty on the metal content alone, before base tariffs and other charges.
HTS Codes Covered by Section 232
Primary Steel (HTS 72-73): - Chapter 72: Iron and steel (flat-rolled products, bars, rods, wire, pipes, tubes) - 7201 (pig iron) - 7206-7207 (semi-finished steel) - 7208-7226 (flat-rolled steel) - 7227-7228 (bars, rods, angles) - 7229-7230 (wire) - 7301-7307 (tubes and pipes)
- Chapter 73: Articles of iron or steel - 7308 (structures and parts—girders, columns, etc.) - 7309-7310 (tanks, vats, drums) - 7311 (cylinders) - 7312 (stranded wire, rope) - 7313 (barbed wire, cloth, fencing) - 7314-7315 (wire netting, chains) - 7316 (anchors, hooks) - 7317 (nails, screws, rivets) - 7318 (fasteners, bolts) - 7319-7320 (springs, wheels) - 7321-7326 (stoves, appliances, tools)
Primary Aluminum (HTS 76): - Chapter 76: Aluminum and aluminum alloys - 7601 (unwrought aluminum) - 7602 (aluminum waste/scrap) - 7603 (aluminum powder/flakes) - 7604-7607 (bars, rods, profiles, wire) - 7608 (tubes and pipes) - 7609 (fittings for tubes) - 7610 (structures and structural parts) - 7611 (containers) - 7612 (tanks, vats, drums) - 7613-7616 (miscellaneous articles—cookware, pressure vessels, etc.)
The Derivatives List: Critical Coverage
A major source of confusion: Section 232 covers not only raw steel and aluminum but also derivative articles—products manufactured from steel or aluminum.
This means:
- A fastener manufacturer importing steel bolts (HTS 7318) pays 50% duty on the finished fastener, not just the raw material. - A construction company importing prefabricated steel beams (HTS 7308) pays 50% on the full value of the structure. - An appliance maker importing stainless steel cookware blank (HTS 7326) pays 50% even though it is partially completed. - An automotive supplier importing stamped steel parts (HTS 7326) pays 50% on those parts. - A beverage company importing aluminum can bodies (HTS 7610 or 7616) pays 50% duty.
The tariff is assessed on the full value of the imported article, regardless of value added by manufacturing. A $10 aluminum can body faces $5 duty if that can is 99% aluminum by weight.
Understanding Derivative Articles
The Commerce Department maintains a detailed list of what qualifies as a steel or aluminum article for Section 232 purposes. The key principle: if the article is classified under Chapters 72-73 (steel) or 76 (aluminum), it is covered.
Some edge cases:
- Composite products with steel/aluminum components: If the article is primarily classified by its steel or aluminum content (using the HS rule of principal component), it is covered. - Coated or alloyed products: Galvanized steel, stainless steel, and aluminum alloys are still covered—coating and alloy composition do not exempt the product. - Mixed-material products: An appliance with steel housing and plastic components is classified by its principal function (usually the housing), so if steel is principal, it is covered.
Country-Specific Treatment
Canada and Mexico (USMCA Partners): - Despite being part of the USMCA trade agreement, Canada and Mexico are NOT exempt from Section 232 tariffs. - Canada is a major exporter of both steel and aluminum to the US, and both countries face the full 50% duty on all HTS codes covered by Section 232. - This is a critical distinction: USMCA eliminates duty on most goods between the three countries, but Section 232 duties apply regardless of USMCA status.
European Union: - The EU negotiated a tariff quota deal in 2021 (steel: 3.25 million metric tons free, then 25%; aluminum: 425,000 metric tons free, then 10%). - However, this quota deal expired in October 2023 and was not renewed. As of 2026, EU steel and aluminum face the full 50% tariff.
United Kingdom: - Similar quota arrangements existed but have expired. The UK now faces 50% on all steel and aluminum.
All Other Countries: - Japan, Korea, Taiwan, Vietnam, India, Russia, Turkey, and all other countries face 50% on steel and aluminum with no exemptions or special arrangements as of 2026.
Product Exclusion Requests
The Commerce Department allows importers to file exclusion requests for specific products believed to cause undue hardship or for which domestic alternatives do not exist.
How to File: 1. Gather documentation of your product (photos, specifications, end-use) 2. Identify the HTS code(s) and explain the product composition 3. Document your supply chain (that there is no viable domestic supplier) 4. File through the Commerce Department exclusion portal 5. Submit detailed justification and economic impact analysis
Current Status: - The exclusion process has historically taken 6-12 months to receive a decision - Approvals are product-specific and apply only to the requesting company - Denials are frequent; the threshold for proving "no domestic alternative" is high
Timeline: Decisions have been slow in 2025-2026, so file exclusions expecting a 12-18 month wait.
Impact on Key Industries
Construction and Infrastructure: - Steel I-beams, columns, rebar, and structural components face 50% - This increases the cost of prefabricated structures and modular construction - Domestic steel mills benefit, but projects become more expensive
Automotive: - Stamped steel and aluminum parts for vehicles face 50% - This flows through to vehicle prices - Domestic automotive suppliers gain margin from protected pricing - However, USMCA rules of origin require 75% regional content for vehicles, so heavy reliance on imported steel/aluminum can jeopardize USMCA treatment
Packaging and Beverage: - Aluminum cans and can bodies face 50% duty - Beverage producers have passed significant costs to consumers - Some producers shifted to alternative packaging or domestic sourcing
Appliances and HVAC: - Stainless steel appliances, air conditioner housings, and heat pump frames face 50% - Appliance manufacturers have absorbed costs or raised prices
Practical Mitigation Strategies
1. Domestic Sourcing - Source steel and aluminum from US mills (U.S. Steel, Cleveland-Cliffs, Aleris/Novelis US operations) - Premium is typically 10-20% above imported prices, but eliminates 50% tariff - Cost breakeven analysis is essential
2. Approved Country Substitution - Countries without tariff escalation are limited, but countries with tariff quotas or trade agreements may offer slightly better rates - This requires detailed tariff analysis and is rarely cost-effective given the 50% baseline
3. Exclusion Request Filing - If your product uses specialty grades or configurations unavailable domestically, file an exclusion - Success rate is approximately 15-25%, so this should be paired with other strategies
4. Downstream Product Redesign - Reduce steel/aluminum content by substituting materials (composites, plastics for non-structural components) - Shift from solid steel components to lighter designs - This may involve R&D cost but can provide durable cost savings
5. Foreign Trade Zone (FTZ) Strategy - Import steel/aluminum into an FTZ and perform final assembly or manufacturing there - FTZ allows deferral of tariff on imported goods that are re-exported or further processed - If goods are exported or if manufacturing adds sufficient value, tariff may be reduced or eliminated - See Foreign Trade Zones vs Bonded Warehouses for full details
6. Cost Pass-Through - For B2B suppliers, transparently document tariff impact and negotiate price adjustments with customers - Many customers expect tariff surcharges to be passed through
Calculating Total Cost
An importer of 10 metric tons of cold-rolled steel coil (HTS 7211.13.0000): - CIF value: $80,000 (at $8,000/ton) - Section 232 tariff (50%): $40,000 - Base MFN duty (0%): $0 - Merchandise Processing Fee (0.3646%): $291 - Harbor Maintenance Fee (0.125%): $100 - Total duties: $40,391 - Effective duty: 50.49% - Landed cost: $120,391 per 10 tons
Use the Duty & Tariff Calculator to model different material and origin scenarios.
Related Reading
For understanding how Section 232 compounds with Section 301 tariffs on downstream products, see Tariff Stacking 2026.
For USMCA-originating goods that contain steel or aluminum, see USMCA Benefits: How to Qualify for Duty-Free Treatment with Canada and Mexico—note the critical caveat that Section 232 does not disappear even for USMCA-origin goods.
Conclusion
Section 232 at 50% on steel and aluminum represents one of the highest tariff rates in US trade law. With no country exemptions and coverage extending to derivative articles, the tariff affects not only raw material importers but manufacturers and retailers throughout the supply chain. Mitigation requires a multi-pronged approach: evaluate domestic sourcing, pursue exclusions if applicable, consider FTZ strategies for complex supply chains, and model cost impact carefully.
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