The latest Section 232 tariff changes cut red tape for derivative product imports but will not bring broad duty relief. Administrative friction will ease, while the cost burden across the steel and aluminium value chains largely remains the same and may even increase in some cases.
A new four-tier tariff structure was introduced
The revised framework reorganises HS codes across four Annexes, each carrying a distinct duty rate and scope:
- Annex I-A retains the original commodity-grade HS codes for steel and aluminium at a 50% duty. Forty-five new codes have been added, covering wire and cable, wire rod, bar and tube across both metals.
- Annex I-B is the new derivatives product list, and the tariff rate for these HS codes is now 25%, or half the previous rate. The duty now applies to the full customs value of the import rather than just the metal content. The net effect could be higher duties for some importers. A good example would be an aluminium filled beer can that was initially tariffed at 50% of the metal content ($0.30–0.50 /can) but will now be subject to a 25% duty on the full value ($2–3) of the filled can. This is amplified for larger goods such as a bulldozer or tractor.
- Annex II lists the 247 HS codes that have been removed from the derivatives products list. This includes 127 steel and 120 aluminium related HS codes. Most of these codes were related to smaller articles such as cookware, cutlery, hardware, furniture parts, etc.
- Annex III includes 35 steel and 13 aluminium derivative HS codes that will be subject to a lesser tariff rate of at least 15% of the full customs value. This is valid until 31 December 2027, with the tariff rate jumping up to 25% after that. This list includes goods deemed critical to the buildout of domestic industrial and energy infrastructure. Some examples include large power transformers, transmission line hardware, equipment used in the production of petrochemicals or LNG, and heavy machinery.
There are a handful of other changes that are worth pointing out. The previous inclusion process has been terminated, but the US Trade Representative now has authority to include additional derivative products as necessary. Products with less than 15% metal content will face no duties.
Imports of derivative products processed entirely from US smelted or poured aluminium were previously fully exempt from the tariffs. They are now subject to a 10% duty on the full customs value.
What this means for importers and domestic metal prices
The most immediate effect is operational with a more straight-forward import process and clearer duty application. CRU has received reports of some imports held up at the border under the previous framework. This change should alleviate that as well as remove ambiguity around the metal declaration process.
The impact on total tariff cost is still unclear and will be product specific. Notably, while some have framed these changes as an inflation mitigant, the restructured duty base means costs could rise for certain goods. However, the Annex III concession will lower rates on infrastructure-critical products through 2027, which will help support increased domestic investment. CRU does not expect these changes to materially move domestic steel or aluminium prices.
