Section 232 Now Taxes Your Whole Product, Not Just the Metal

If you import finished goods that contain steel, aluminum, or copper — but are not primarily made of those metals — your Section 232 tariff calculation changed on April 6, 2026. The White House proclamation issued April 2 restructured how these duties apply to "derivative" products, and the change has real implications for your landed cost.1

Many importers are still running models based on the old method. Here is what changed, what it costs, and whether your products now qualify for a new exemption you may not know about.

The Old Method vs. the New Method

Before April 6, Section 232 tariffs on derivative products — finished goods classified outside the primary metal chapters but containing meaningful amounts of steel, aluminum, or copper — were calculated on the declared metal content value. If your $100 product contained $30 worth of copper components, you paid Section 232 only on that $30.

The April 6 proclamation changed that. Tariffs on derivative products now apply to the full entered value of the product, not the metal portion alone.2

Here is what that looks like in practice: a $100 appliance with $30 in copper components.

• Old calculation: 50% rate on $30 metal content = $15 Section 232

• New calculation: 25% rate on $100 full value = $25 Section 232

The derivative rate dropped from 50% to 25%, but the base expanded from metal content value to the full product value. For most derivative products with more than 50% non-metal content, the net result is a higher duty bill.

The New Tiered Rate Structure

The April 6 proclamation also introduced a formal tier system that replaces the previous flat rate approach for Section 232.1 Understanding which tier your product falls into is now essential:

• 50% — Primary articles: Products made entirely or almost entirely of steel, aluminum, or copper. Stainless steel cookware, copper pipe, aluminum extrusions. These have always paid on full customs value. Their rate doubled to 50% in mid-2025 for steel and aluminum, and copper was added at 50% in August 2025.3

• 25% — Derivative articles: Finished goods containing substantial amounts of these metals but classified outside the primary metal chapters. Appliances, motors, auto parts, HVAC components, electrical equipment. Now assessed on full customs value.

• 15% — Metal-intensive industrial equipment: Large machinery, transformers, and electrical grid equipment with significant metal content. This transitional rate runs through December 31, 2027.

• 10% — US-origin metal content: Articles manufactured abroad but made substantially from US-produced metals.

• 0% — Low metal-content products: Products where steel, aluminum, and copper together constitute 15% or less of total customs value. This is new, and it matters for a lot of importers.

The 15% Exemption: Could Your Product Qualify?

The new threshold is significant. If the total value of steel, aluminum, and copper components in your finished product is 15% or less of its total customs value, your product is entirely exempt from Section 232.2

Many finished goods fall into this range. A $200 fitness tracker might contain $8 worth of copper traces and aluminum housing. A $300 piece of furniture with metal hardware might have $30 in steel and aluminum fittings — exactly 10% of customs value. These could qualify for the 0% rate under the new framework.

Before April 6, these products still paid Section 232 on their metal content values — small amounts, but a real cost. Under the new rules, if you can document that your product's total metal content is 15% or less of customs value, you owe nothing in Section 232.

The catch: you need to document and substantiate the claim. CBP can challenge metal content declarations, and inaccurate claims lead to underpayment penalties. Request a Bill of Materials from your supplier that quantifies metal component costs by value. A licensed customs broker can help you structure this documentation correctly before your next entry.

Which Importers Are Most Affected

The full-value shift hits hardest for companies importing finished goods with significant but sub-dominant metal content — products that were previously paying Section 232 on a modest metal-content base but now face it on the full product value.

• Appliance and HVAC importers. Electric motors, washing machines, air conditioners, heat exchangers — these are derivative products with meaningful copper and steel content (often 20–40% of customs value). The shift to full-value calculation at 25% represents a real cost increase over the old metal-content method. Some large industrial HVAC units may qualify for the 15% transitional rate.

• Auto parts importers. Many components — axles, suspension parts, brake assemblies — contain significant steel and aluminum but are classified under Chapter 87 (vehicles and parts) rather than Chapter 73 (steel articles). These have historically been derivative products paying on metal content only. That changes now.

• Consumer electronics. The picture is mixed. Many electronics have small metal content relative to their total value — circuit boards, plastic housings, glass screens dominate the BOM. These may now qualify for the 15% exemption they could not access before. Copper-heavy devices (wired headsets, transformers, motors) will see a higher effective rate.

• Industrial machinery importers. If you import large equipment — generators, CNC machines, industrial pumps — look carefully at the 15% transitional rate for metal-intensive industrial equipment. Getting classified here instead of at the 25% derivative rate could save 10 percentage points in duty through 2027.

Three Actions to Take Before Your Next Shipment

1. Audit your product's metal content by value

The 15% threshold and the derivative classification both require you to know, with reasonable specificity, what percentage of your product's total customs value consists of steel, aluminum, and copper. This is value percentage, not weight percentage. Request a Bill of Materials from your supplier that includes component costs, and document the metal content portion separately.

If your product is close to the 15% threshold in either direction, this documentation is essential. The difference between qualifying for 0% and paying 25% on full value is significant at any volume.

2. Confirm your tier classification with your broker

The line between primary article (50%), derivative article (25%), and industrial equipment (15%) is determined by HTS classification and product composition. If your products shifted under the new structure — or if you have been calculating Section 232 under the old metal-content method — work through the updated classification with a customs broker before the next entry filing.

The stakes are higher now that the base has expanded to full customs value. An incorrect tier classification costs more than it used to.

3. Rebuild your landed cost model

If you have a landed cost spreadsheet or pricing model that includes Section 232 duties, it needs to be updated. The model should now apply the correct tier rate to the full customs value of your product — not the metal content value. For China-origin goods, add Section 301 duties and the standard MFN rate on top. For non-China origins, Section 301 drops out but Section 232 still applies at the full-value rate.

Products from Canada and Mexico with valid USMCA certification remain exempt from Section 232. If you source from those countries, nothing changes for USMCA-qualified goods.

This Isn't Going Away

The Section 232 program now covers steel, aluminum, and copper at higher rates and on a broader calculation base than at any point since it was first invoked in 2018.4 Each expansion has been framed as a national security measure, and the logic continues to hold politically regardless of which party controls the White House.

Importers who build accurate, product-specific landed cost models are better positioned than those reacting to each change after it shows up in a customs invoice. The time to update your models and your documentation is before the next shipment clears, not after.

If you want help calculating your Section 232 exposure under the new methodology or navigating the tier classification for your products, the team at Cubic works with importers on exactly this. Get in touch and we can run through the numbers on your specific product categories.