Section 232 Tariffs on Steel and Aluminum Explained

Section 232 Tariffs on Steel and Aluminum: A Complete Guide

Section 232 tariffs are additional U.S. import duties of 25% on steel and 10% on aluminum, imposed on national security grounds under the Trade Expansion Act of 1962. For any business that imports metal products — or finished goods containing significant steel or aluminum content — understanding how these tariffs work is not optional. A single misclassified shipment can generate a six-figure duty bill.

What Are Section 232 Tariffs?

Section 232 tariff: An additional import duty authorized by Section 232 of the Trade Expansion Act of 1962 (19 USC 1862), which allows the President to restrict imports that the Secretary of Commerce determines threaten national security. The current tariffs — 25% on steel mill products and 10% on aluminum articles — were imposed by Presidential Proclamation 9704 and 9705 in March 2018 following a Department of Commerce investigation that found foreign steel and aluminum imports posed a national security risk to the United States.

These tariffs are separate from and cumulative with standard Most Favored Nation (MFN) duties. An HTS code that carries a 3% base duty on steel pipe, for example, becomes effectively a 28% duty once Section 232 is layered on top.

The tariffs are also distinct from antidumping (AD) and countervailing duties (CVD), though those can apply simultaneously. In some cases, an importer faces MFN duty + Section 232 tariff + AD/CVD — all three stacked.

As of 2024, the U.S. International Trade Commission estimates that the steel and aluminum tariffs cover roughly $25 billion in annual U.S. imports. Covered products span thousands of HTS subheadings across Chapters 72, 73, 76, and a growing list of “derivative” articles in other chapters.

How Section 232 Tariffs Work: Step-by-Step

Understanding the compliance workflow is essential before your first affected shipment arrives at port.

Step 1 — Determine Whether Your Product Is Covered

The scope of Section 232 includes:

• Steel mill products: Flat-rolled steel, bars, rods, wire, tubes, pipes, structural shapes, and more (primarily HTS Chapter 72 and 73 subheadings)
• Aluminum articles: Unwrought aluminum, bars, rods, wire, tubes, and fabricated forms (primarily HTS Chapter 76 subheadings)
• Derivative steel and aluminum articles: Certain finished goods with significant metal content — added to scope by Proclamations 9980 (steel, effective February 2020) and 9981 (aluminum, effective March 2020)

Check the official HTS at hts.usitc.gov for the applicable Chapter 99 provision (e.g., 9903.80.01 for most steel, 9903.85.01 for most aluminum). These Chapter 99 HTS codes are the mechanism through which CBP collects the additional duty.

Step 2 — Confirm Country of Origin

Section 232 tariffs are applied based on the country of origin, not the country of export. Steel melted and poured in China but shipped through Vietnam is still subject to the China tariff rate. CBP enforces this through substantial transformation analysis under 19 CFR Part 102.

Countries with full exemptions or quota agreements (as of mid-2024) include:

• Canada — fully exempt (permanent USMCA arrangement since 2019)
• Mexico — fully exempt (permanent USMCA arrangement since 2019)
• Australia — fully exempt
• Argentina, Brazil, South Korea — subject to absolute quotas; imports within quota are exempt, above-quota shipments pay the full tariff

The European Union, Japan, and the United Kingdom operate under tariff-rate quota (TRQ) arrangements. Imports within the quota are exempt; those above pay the full 25%/10% rate.

Step 3 — File the Correct Entry

Your customs broker must include both the standard HTS code and the applicable Chapter 99 HTS code on the CBP entry. The Chapter 99 number triggers the additional duty calculation in CBP’s Automated Commercial Environment (ACE) system. Omitting it is a compliance error that can result in a duty underpayment.

If an approved product exclusion applies, the exclusion number must also be referenced on the entry. The exclusion is tied to a specific HTS code and product description — not to the importer generally.

Step 4 — Pay Duties at Time of Entry

Section 232 duties are collected as estimated duties at the time of entry. They are deposited with CBP immediately, not deferred. If a formal entry bond is on file, CBP can liquidate the entry later, but any additional duty found due at liquidation carries interest.

Step 5 — Monitor for Exclusions and Changes

The Section 232 framework changes frequently. Product exclusions expire, new HTS codes are added to scope, and quota thresholds reset annually. Assign someone internally — or lean on a licensed broker — to track Commerce Department Federal Register notices and CBP.gov updates.

The Legal Framework: Statutes, Regulations, and Proclamations

Section 232 authority derives from 19 USC 1862, which grants the President broad power to adjust imports that threaten national security after a Commerce Department investigation. The current steel and aluminum tariffs were authorized by:

• Presidential Proclamation 9704 (March 8, 2018) — 10% tariff on aluminum articles
• Presidential Proclamation 9705 (March 8, 2018) — 25% tariff on steel mill products
• Presidential Proclamation 9980 (January 24, 2020) — extended tariffs to derivative steel articles
• Presidential Proclamation 9981 (January 24, 2020) — extended tariffs to derivative aluminum articles

The exclusion process is administered by the Department of Commerce Bureau of Industry and Security (BIS) under regulations codified at 15 CFR Part 705. Importers, manufacturers, or end users can request product exclusions by demonstrating that the specific product is not produced in the U.S. in sufficient quantity or quality, or that application of the tariff would cause severe economic harm.

CBP’s authority to collect and enforce these duties flows from 19 USC 1484 (entry of merchandise) and 19 USC 1592 (penalties for fraud, gross negligence, and negligence). Penalties under 19 USC 1592 for negligent misclassification can reach the full domestic value of the merchandise.

For specific country-of-origin disputes involving steel and aluminum, CBP has published binding rulings — searchable at rulings.cbp.gov — that illustrate how the substantial transformation test is applied.

Real-World Examples

Example 1 — The Furniture Manufacturer

A U.S. furniture company imports steel tube frames from a manufacturer in Vietnam. The frames are made from Chinese steel. Because the steel was melted and poured in China, and the processing in Vietnam does not constitute substantial transformation under 19 CFR Part 102, CBP finds the country of origin to be China. The 25% Section 232 tariff applies. The importer owed $312,000 in additional duties across two years of shipments — plus interest — after a CBP audit.

Example 2 — The Aluminum Extrusion Importer

A construction products company imports aluminum window frames from Canada. Because Canada is fully exempt under the USMCA-based arrangement, no Section 232 tariff applies — provided the aluminum was originally smelted in Canada or a qualifying country. The company’s broker files the standard entry with the Canadian origin claim, and no Chapter 99 code is required.

Example 3 — The Product Exclusion Success

A specialty manufacturer imports a unique grade of high-strength steel bar used in aerospace tooling. No domestic U.S. producer makes this exact specification. The manufacturer files a product exclusion request with Commerce BIS, demonstrating domestic unavailability. The exclusion is granted for HTS 7228.50.5040 for 12 months. The broker references the exclusion number on each subsequent entry, avoiding $88,000 in annual tariff exposure.

Example 4 — The Derivative Product Trap

An appliance importer brings in finished washing machines from China. Because the machines contain significant steel components, they fall under the derivative steel articles proclamation (Proclamation 9980) added in 2020. The importer, unaware of the 2020 expansion, had been filing entries without the Section 232 Chapter 99 code for two years. CBP issued a penalty notice for duty underpayments totaling $210,000.

Section 232 Tariff Comparison by Country and Product

TRQ = Tariff-Rate Quota. Quota thresholds reset annually and are monitored by Commerce and CBP. Check enforcement.trade.gov and Commerce Federal Register notices for current quota utilization.

Common Mistakes and Misconceptions

Mistake 1 — Treating Someone Else’s Exclusion as Your Own

Product exclusions granted by Commerce BIS apply to the specific company that requested them — or in some cases to all importers for a specific product, but this must be confirmed explicitly. Many importers assume that if a competitor received an exclusion for a similar product, they can use it. They cannot. Using an invalid exclusion reference on a CBP entry is a misclassification that can trigger 19 USC 1592 penalties.

Mistake 2 — Confusing Country of Export with Country of Origin

Steel is often transshipped through third countries before arriving in the U.S. The Section 232 tariff follows the country where the steel was melted and poured (or substantially transformed), not where it was last shipped from. A shipment coming from a Section 232-exempt country may still be fully dutiable if the underlying metal originated in a non-exempt country.

Mistake 3 — Ignoring Derivative Articles

The 2020 expansion of Section 232 to derivative steel and aluminum articles catches importers off guard regularly. Finished goods — auto parts, certain tools, hardware items, and appliances — may now be subject to Section 232 if they contain significant steel or aluminum. Check the specific Chapter 99 HTS provisions for derivative articles before assuming your finished goods are unaffected.

Mistake 4 — Assuming Tariffs Are Temporary

Section 232 tariffs have been in place since 2018 and have survived two administrations. Procurement and pricing decisions should account for these duties as a structural cost, not a temporary anomaly. Companies that built supply chains assuming the tariffs would disappear quickly absorbed years of unplanned duty expense.

Mistake 5 — Skipping a Licensed Customs Broker

Section 232 compliance involves layered duties, country-of-origin analysis, quota monitoring, exclusion management, and Chapter 99 HTS coding — all of which must be executed correctly on every entry. An experienced licensed customs broker who works regularly with metal imports is not optional overhead. For high-volume steel or aluminum importers, a missed Chapter 99 code on a single shipment can cost more than an entire year of brokerage fees.

If you need a broker with metal or manufacturing sector experience, search all CBP-licensed customs brokers or browse brokers by state to find verified options near your port of entry.

Tools and Resources for Section 232 Compliance

Managing Section 232 exposure requires the right data sources. Here are the primary tools practitioners rely on:

CBP ACE Portal — The Automated Commercial Environment (cbp.gov) is where entries are filed and duty payments are processed. Your broker works within ACE directly, but importer accounts can also be set up for visibility.

HTS Online (hts.usitc.gov) — The Harmonized Tariff Schedule is the definitive source for identifying whether your product falls under a Section 232 Chapter 99 provision. Search by product description or HTS subheading and review the Chapter 99 notes.

CBP Binding Rulings Database — rulings.cbp.gov contains thousands of rulings on country of origin