Section 232 Tariffs 2026: Why Your BOM Sets the Rate

On April 6, 2026, Section 232 tariffs on steel, aluminum, and copper changed how they are calculated. Tariffs now apply to the full customs value of imported products — not just the metal portion inside them. For importers of derivative products, this means your bill of materials (BOM) now directly determines how much you pay at the border.

This guide breaks down the new 5-tier rate system, the 15% metal content threshold, and what documentation you need to prove your rate.

What Changed in Section 232 Tariffs on April 6, 2026?

Section 232 tariffs now apply to the full customs value of covered metal products and their derivatives, regardless of metal content. Before April 6, tariffs on many derivative articles were calculated based on the declared value of the metal content within a product. That method is gone.

According to the White House Proclamation (April 2, 2026), the additional ad valorem duty imposed under Section 232 shall apply to the full customs value of the imported product, regardless of metal content. This applies to goods entered for consumption or withdrawn from warehouse on or after 12:01 a.m. EDT on April 6, 2026.

The practical impact is significant. If you import a $10,000 machine that contains $2,000 worth of steel, the old rule taxed the $2,000. The new rule taxes the full $10,000. Same product, same steel, dramatically different duty.

For exporters, this also changes the conversation with your U.S. buyers. They will now ask for metal content data that was never part of the transaction before.

How Does the New 5-Tier Rate System Work?

The new Section 232 framework assigns tariff rates based on how much metal a product contains and where that metal was produced. There are five tiers, each with distinct documentation requirements.

50% — Full metal articles. Products made entirely or almost entirely of steel, aluminum, or copper pay 50% on their full customs value. According to the White House Fact Sheet, examples include steel coils and aluminum sheet. This is the highest tier and the default for primary metal products.

25% — Metal-heavy derivatives. Derivative articles substantially made of steel, aluminum, or copper pay 25% on the full value. This covers fabricated components, machinery housings, metal fittings, and industrial assemblies listed in Annex I-B of the Proclamation. For customs brokers and importers, this category requires strong BOM and material composition support.

15% — Industrial and grid equipment (temporary through 2027). Certain metal-intensive industrial machinery and electrical grid equipment qualify for a reduced 15% rate through December 31, 2027. The White House describes this as support for "the massive industrial base buildout currently underway across the United States." This rate applies to transformers, heavy switchgear, industrial enclosures, and similar power-sector products.

10% — U.S.-origin metal. Products manufactured abroad but made entirely with American steel, aluminum, or copper qualify for a 10% rate. The metal must be smelted and cast (aluminum/copper) or melted and poured (steel) in the United States, with at least 95% U.S.-origin content required.

0% — Metal content at or below 15%. Products with 15% or less steel, aluminum, or copper by weight are no longer subject to Section 232 tariffs. This threshold applies to derivative articles classified outside HTS Chapters 72–76. Products classified within those chapters remain covered regardless of percentage.

Why Does the 15% Metal Content Threshold Matter?

The 15% threshold creates a sharp line between paying nothing and paying 25% or more on the full product value. Two nearly identical products — one at 14% steel content, another at 16% — face completely different duty treatment under the same rule.

This makes precise metal content documentation critical. According to customs compliance analysts at GHY International, the Proclamation "redefines how tariffs are assessed, ensuring they reflect the full value of imported steel, aluminum, and copper products."

There is one important limitation. The 15% exemption only applies to products classified outside HTS Chapters 72 through 76. If your product falls within those chapters — covering iron, steel, aluminum, or copper articles — Section 232 duties apply regardless of metal percentage. Annex IV of the Proclamation outlines the criteria for determining whether a product meets this exemption.

For products near the 15% boundary, accurate weight-based metal content calculations become essential. A product at 14.8% is exempt. The same product with a slightly different alloy or fastener configuration at 15.3% is not. This level of precision was never required under the previous system.

What Documents Do Importers Need Under the New Rules?

Importers now need to prove exact metal percentages and metal origin to qualify for lower rates or the 15% exemption. The documentation burden has shifted from a simple HTS classification exercise to a materials-based compliance process.

• Bill of Materials (BOM) — showing exact metal content by weight percentage

• Melt and pour certificates — proving where steel was melted and poured, required for the 10% U.S.-origin rate

• Smelter declarations — confirming where aluminum or copper was smelted and cast

• Supplier certifications — attesting to metal composition and origin

• Engineering specifications — supporting the declared metal percentage with technical data

According to trade compliance analysis from CustomsIntel, the new system "moves Section 232 analysis closer to a technical engineering exercise rather than a simple HTS review." Without supporting documentation, CBP can assess the highest applicable rate.

The critical point for importers is that the burden of proof has shifted. Under the old system, HTS classification largely determined your rate. Under the new system, you must affirmatively prove your metal content and origin to avoid the default 50% rate. Missing documentation does not result in an average or estimated rate. It results in the maximum.

How Does This Affect Exporters and Suppliers?

If you are an exporter shipping products that contain steel, aluminum, or copper to the United States, your buyers will need metal content documentation from you. This is no longer optional — it directly affects their landed cost and their willingness to buy.

Exporters should prepare to provide:

• Exact metal content percentages on commercial invoices or supplemental declarations

• Country-of-melt or country-of-smelt certificates for each metal component

• BOM breakdowns that match the weight-based calculation CBP requires

The April 2 Proclamation also ended the previous inclusion process for derivative products. The Secretary of Commerce and USTR can now add derivative articles to the covered list on a rolling basis without public notice-and-comment rulemaking. This means the list of products subject to Section 232 can expand at any time.

What About Foreign Trade Zones and Drawback?

Products admitted to a U.S. Foreign Trade Zone (FTZ) on or after April 6, 2026, must enter under "privileged foreign status" as defined in 19 CFR 146.41. This locks in the applicable duty rate at the time of admission, eliminating the ability to defer or restructure duty exposure through FTZ strategies.

Manufacturing drawback under 19 U.S.C. 1313(a)–(b) remains available for Annex I-B and Annex III articles that are products of Trade Agreement Partners — currently the UK, EU, Japan, South Korea, Mexico, Canada, and any future reciprocal partners — where the metal was smelted or cast in a partner country and the article is not under antidumping or countervailing duty orders.

One additional note: products containing Russian-origin aluminum remain subject to a 200% tariff rate under the Proclamation, regardless of other tier classifications.

Checklist: Section 232 Full-Value Tariff Compliance

• Identify covered products — check your HTS classifications against Annexes I-A, I-B, II, III, and IV

• Calculate metal content by weight — determine if the 15% exemption applies

• Collect BOM and melt/smelt certificates — from every supplier in your chain

• Recalculate landed cost — using full customs value, not embedded metal value

• Update entry instructions — ensure your customs broker has the correct rate tier and supporting docs

• Monitor Annex changes — Commerce and USTR can add derivative articles without notice