Rate Structure
The April 2 proclamation[1] replaces prior apportionment-based calculation with duties assessed on the entire customs value of covered imports, regardless of actual metal content.[2][3]
| Category | Coverage | Rate |
|---|---|---|
| Metal articles | HTSUS Ch. 72, 73, 74, 76 — articles made entirely or almost entirely of steel, aluminum, copper | 50% |
| Derivative articles | Products with >15% steel/aluminum/copper by weight | 25% |
| Below threshold | Products with ≤15% metal by weight | Exempt |
| UK-origin | Products made entirely with UK aluminum or steel | 25% / 15% |
| Russian-origin aluminum | Aluminum smelted or cast in Russia | 200% |
| US-origin abroad | US metal products manufactured outside US | 10% |
Products listed on multiple annex lists pay only the listed rate, not combined.[3] Certain items (packaged products, select consumer goods) removed from coverage per Annex II.[4]
Exposure Assessment
The full customs value basis disproportionately hits sectors with high derivative content — finished goods where metals are a component, not the product itself. The 25% auto tariff (HTS 9903.94.32) already applies to foreign cars and parts, but steel/aluminum content in those products now faces additional Section 232 duties on the full value.[5]
In August 2025, the US expanded coverage to 407 derivative categories at 50%, prompting EU countermeasures.[6] The April 2026 changes consolidate and simplify this into the weight-based threshold system.
- Automotive — steel bodies, aluminum chassis components. 25% auto tariff stacks with 232 on metal content. Highest volume exposure for EU exporters[5]
- Machinery — turbines, presses, industrial equipment. High derivative classification rate across product lines
- Aerospace — alloys and structural components. National security overlap complicates exclusion applications
Sector-level cost estimates (automotive €2–3B+, machinery €1B+) are widely cited but lack verified sourcing. No official EU impact assessment has been published for the April 2026 changes. Eurostat Q1 2026 trade data, expected in May, will provide the first hard numbers. We'll update when available.
The 15% Threshold
The weight-based threshold creates a binary classification:[1][3]
- Above 15% — 25% duty on full customs value
- Below 15% — zero Section 232 exposure
- At the boundary — classification disputes likely; CBP enforcement posture unclear
Product redesign to push metal content below 15% by weight eliminates Section 232 exposure entirely. Composite alternatives, high-strength low-alloy steel (lower volume for equivalent performance), and material substitution are the primary engineering paths. Model redesign cost vs. ongoing 25% duty on full value per SKU.
USMCA Rerouting
USMCA-compliant steel and aluminum qualifies for Section 232 exemption through the melt-and-pour rule (steel) or smelt-and-cast rule (aluminum). Metal must be melted/poured or smelted/cast in the US, Canada, or Mexico to qualify.[7][8]
- Canadian production — no blanket exemption (unlike UK at 25%), but melt/pour in North America qualifies under USMCA. Canada imposed its own 50% surtax on non-FTA steel imports (June 2025) to counter diversion[8]
- Mexican production — same melt/pour requirements. Mexico-origin goods compliant with USMCA are exempt from Section 232 increases[7]
- No duty drawback — no de minimis relief applies to affected entries; FTZ entries incur duties on removal[7]
UK Rate Arbitrage
UK-origin products made entirely with UK aluminum or steel qualify for reduced rates: 25% or 15% depending on classification — half the standard rate.[1][3] Certain aerospace products from the UK, EU, and Japan receive full exemptions. New Annex IV aluminum weight exemption effective April 6 adds further carve-outs.
For EU manufacturers with UK operations or UK supply chain options, this is a viable rate arbitrage on qualifying products. VERT. Assessment
Filing Requirements
- Declare steel under HTSUS Chapter 72/73, aluminum Chapter 76, copper Chapter 74 — steel and aluminum content separately[7]
- Mill test certificates proving metal origin — required for all shipments[3]
- Commercial invoice + bill of lading + continuous bond
- Anti-circumvention documentation — demonstrate no transshipment via third countries to avoid origin classification[3]
- Exclusion requests via BIS for products with no substitution path — Annex II removals and Annex III transitional rates (up to 15% for low-MFN items through 2027) available[3]
- Verify HTS codes against CBP's updated classification lists[7]
- Internal audit of product metal content by weight against 15% threshold — quarterly minimum VERT. Rec
Timeline
Position
Commerce and USTR now hold authority to include additional derivative articles when imports threaten national security.[1] Scope is more likely to widen than narrow. Three priorities:
- Classify every US-bound product line against the 15% weight threshold. This is now a P&L variable — track it live, not annually.
- Model USMCA rerouting for top exposed SKUs. Canadian melt-and-pour for metal-intensive inputs, Mexican assembly for derivative products. Compare restructuring cost vs. ongoing 25–50% duty exposure.
- File exclusion requests now for critical products with no substitution path. Annex II and III provide carve-outs, but availability is narrowing with each proclamation update.