Section 232 Steel and Aluminum Tariffs: Current Rates and Impact
The U.S. imposes a 25% tariff on steel imports and a 10% tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962, affecting billions of dollars in trade annually. These tariffs, implemented in March 2018 citing national security concerns, apply to most countries except those
The U.S. imposes a 25% tariff on steel imports and a 10% tariff on aluminum imports under Section 232 of the Trade Expansion Act of 1962, affecting billions of dollars in trade annually. These tariffs, implemented in March 2018 citing national security concerns, apply to most countries except those with negotiated exemptions or quota arrangements, significantly increasing costs for U.S. manufacturers who rely on imported metals.
In this guide, you'll learn:
- What Section 232 tariffs are and their legal basis
- Current tariff rates and which countries are affected
- How the product exclusion process works
- Which HS code chapters face these tariffs
- The economic impact on downstream manufacturers
- Recent policy changes and country-specific arrangements
What Are Section 232 Steel and Aluminum Tariffs?
Section 232 tariffs are additional duties imposed on imported steel and aluminum products based on national security grounds. Under Section 232 of the Trade Expansion Act of 1962, the U.S. President can restrict imports or impose tariffs if the Department of Commerce determines that certain imports threaten national security [U.S. Department of Commerce, 2018].
President Trump invoked this authority in March 2018, proclaiming that steel and aluminum imports had weakened the U.S. industrial base to the point where domestic production capacity for defense and critical infrastructure was at risk. The tariffs took effect on March 23, 2018, with the stated goal of revitalizing domestic steel and aluminum production.
These tariffs are additional to normal customs duties. For example, if steel wire from China normally faces a 5% Most Favored Nation (MFN) duty rate, the Section 232 tariff adds another 25%, creating a total duty rate of 30%.
What Are the Current Tariff Rates for Steel and Aluminum?
The base Section 232 tariff rates remain in effect as follows:
| Product Category | Tariff Rate | Implementation Date | Legal Citation |
|---|---|---|---|
| Steel articles | 25% | March 23, 2018 | Proclamation 9705 |
| Aluminum articles | 10% | March 23, 2018 | Proclamation 9704 |
| Steel derivative products | 25% | January 24, 2020 | Proclamation 9980 |
Important note: These rates apply in addition to standard customs duties. A steel product with a 3% MFN duty rate will actually face 28% total duties (3% + 25% Section 232 tariff).
Steel Derivative Products Expansion
In February 2020, the Trump administration expanded Section 232 coverage to include certain steel derivative products—items made from steel but not classified as primary steel products. This includes products like nails, staples, and certain fasteners that previously avoided the tariffs [U.S. Department of Commerce, 2020].
Which Countries Are Affected by Section 232 Tariffs?
The tariffs initially applied globally, but the U.S. has since negotiated exemptions, quota arrangements, and modified terms with multiple countries.
Countries Fully Subject to Tariffs (as of 2024)
| Country/Region | Steel Tariff | Aluminum Tariff | Notes |
|---|---|---|---|
| China | 25% | 10% | No exemptions; highest volume source |
| Russia | 25% | 10% | Additional sanctions also apply |
| Japan | 25% | 10% | Limited exemptions for specific products |
| India | 25% | 10% | Exemptions expired |
| Turkey | 50% (steel only) | 10% | Higher steel rate due to additional duties |
Countries with Modified Arrangements
European Union: After years of negotiation, the U.S. and EU reached a tariff-rate quota (TRQ) agreement in October 2021. The arrangement eliminates Section 232 tariffs on a specified volume of EU steel and aluminum imports, with tariffs applying to volumes exceeding the quota [U.S. Trade Representative, 2021].
Mexico and Canada: Initially exempted, then tariffs imposed, then exempted again on May 19, 2019 as part of USMCA (United States-Mexico-Canada Agreement) negotiations. However, the U.S. reimposed a 25% tariff on Canadian aluminum in August 2020 before suspending it again in September 2020. As of 2024, both countries remain exempt under USMCA provisions [USTR, 2019].
South Korea: Negotiated a quota system in 2018 allowing 2.68 million tons of steel annually to enter tariff-free, with tariffs applying to volumes above this threshold [U.S. Department of Commerce, 2018].
Argentina and Brazil: Initially exempted, then made subject to quotas. Steel imports within the quota limits face 0% Section 232 tariffs, while volumes exceeding quotas face the 25% tariff [Proclamation 9777, 2019].
Australia: Permanently exempted from both steel and aluminum tariffs due to integrated defense industry ties and minimal risk of transshipment [Proclamation 9705, 2018].
Which HS Codes Are Subject to Section 232 Tariffs?
Section 232 tariffs apply to products classified under specific chapters of the Harmonized Tariff Schedule (HTS — the U.S. classification system for imports based on the international Harmonized System).
Steel Product HS Chapters
The steel tariffs primarily affect products in these HTS chapters:
Chapter 72 - Iron and Steel
- 7206: Iron and non-alloy steel in ingots
- 7207: Semi-finished products of iron or non-alloy steel
- 7208-7212: Flat-rolled products
- 7213-7215: Bars and rods
- 7216: Angles, shapes, and sections
- 7217: Wire of iron or non-alloy steel
- 7218-7229: Stainless steel products
- 7301-7307: Articles of iron or steel (pipes, tubes, fittings)
Chapter 73 - Articles of Iron or Steel
- 7304: Tubes, pipes, and hollow profiles
- 7305-7306: Iron or steel pipes and tubes
Steel Derivatives (added 2020)
- 7317: Nails, tacks, drawing pins, and staples
- 8206: Hand tools (certain metal-cutting tools)
- 8207: Interchangeable tools for hand tools
Aluminum Product HS Chapters
The aluminum tariffs affect products in these chapters:
Chapter 76 - Aluminum and Articles Thereof
- 7601: Unwrought aluminum
- 7603: Aluminum powders and flakes
- 7604: Aluminum bars, rods, and profiles
- 7605: Aluminum wire
- 7606: Aluminum plates, sheets, and strip (thickness >0.2mm)
- 7607: Aluminum foil
- 7608: Aluminum tubes and pipes
- 7609: Aluminum tube or pipe fittings
Example: A U.S. manufacturer importing aluminum sheets (HTS 7606.11.30) from China would face:
- Base MFN duty: 2.5%
- Section 232 tariff: 10%
- Total duty rate: 12.5%
If the manufacturer imports 10,000 kg valued at $25,000, the total duties would be $3,125 instead of $625 without the Section 232 tariff—an additional $2,500 in costs.
How Does the Product Exclusion Process Work?
Recognizing that some U.S. businesses have no domestic alternatives for specific steel or aluminum products, the Department of Commerce established a product exclusion process allowing companies to request exemptions.
Exclusion Request Process
-
Submission: Companies file exclusion requests through the Commerce Department's Regulations.gov portal, specifying the exact product by HTS code, dimensions, specifications, and source country.
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Public Comment: The request is published for public comment. Domestic steel or aluminum producers can object if they claim to produce a comparable product.
-
Review: The Bureau of Industry and Security (BIS) reviews the request, objections, and rebuttals. Key criteria include:
- Whether the product is available from U.S. sources in sufficient quantity and quality
- Whether granting the exclusion would undermine Section 232's national security objectives
- The product's specific technical requirements
-
Decision: BIS grants or denies the exclusion. Approved exclusions are product-specific and company-specific—they don't apply to other importers or similar products.
-
Validity Period: Granted exclusions are typically valid for one year from approval date and are retroactive to the exclusion request submission date.
Exclusion Statistics and Challenges
Between March 2018 and December 2022, the Commerce Department received over 450,000 exclusion requests and approved approximately 36% [U.S. Department of Commerce, 2022]. However, the process has faced significant criticism:
- Processing delays: Some requests took 12-18 months to process, exceeding the one-year validity period
- Rebuttal advantage: Domestic producers could effectively block exclusions through objections, even when their products weren't true substitutes
- Specificity requirements: Exclusions were granted for extremely narrow product specifications, requiring new requests for minor variations
- Expiration issues: Many exclusions granted in 2018-2019 have expired, and the renewal process is burdensome
Current status: As of 2024, the exclusion request portal remains open, but new submissions face uncertain processing timelines. The Commerce Department periodically announces focused exclusion processes for specific product categories.
What Is the Economic Impact on Downstream Manufacturers?
While Section 232 tariffs aimed to protect domestic steel and aluminum producers, they've significantly increased costs for U.S. manufacturers who use these metals as inputs—the "downstream" industries.
Direct Cost Increases
U.S. manufacturers using imported steel or aluminum face immediate cost increases:
Example calculation for an auto parts manufacturer:
- Annual aluminum imports: 500,000 kg
- Average import value: $2.50/kg
- Total import value: $1,250,000
- Section 232 tariff (10%): $125,000 additional annual cost
- Previous duty (2.5%): $31,250
- Net increase: $93,750 per year
For a mid-sized manufacturer operating on 10-15% profit margins, this represents a substantial erosion of profitability.
Industries Most Affected
| Industry Sector | Primary Impact | Employment Affected |
|---|---|---|
| Automotive manufacturing | Increased vehicle production costs | 950,000+ jobs [Motor & Equipment Manufacturers Association, 2019] |
| Construction | Higher costs for structural steel, roofing | 7.2 million jobs |
| Beverage industry | Aluminum can price increases | 400,000+ jobs |
| Oil and gas | Steel pipe and tube costs for infrastructure | 500,000+ jobs |
| Aerospace | Specialty aluminum and steel components | 500,000+ jobs |
Documented Economic Effects
Several studies have quantified Section 232's downstream impact:
Federal Reserve Study (2020): Manufacturing employment in steel-using industries declined by 75,000 jobs in the first year after tariff implementation, while steel-producing industries added only 8,700 jobs—a net loss of 66,300 jobs [Federal Reserve Board, 2020].
Trade Partnership Analysis (2019): Estimated that Section 232 tariffs cost downstream industries 16 jobs for every 1 job gained in steel and aluminum production, with total economic costs exceeding $900,000 per job created [Trade Partnership Worldwide, 2019].
Consumer costs: The tariffs increased prices for goods containing steel and aluminum. A 2019 study estimated U.S. consumers paid an additional $650 million annually for beer, soda, and other canned beverages due to aluminum tariff-driven can price increases [Beer Institute, 2019].
Supply Chain Disruptions
Beyond direct costs, Section 232 tariffs have caused:
- Sourcing uncertainty: Manufacturers struggled to find alternative suppliers or secure exclusions for specialized materials
- Competitive disadvantage: U.S. manufacturers compete with foreign companies that don't face equivalent input costs
- Investment hesitation: Capital investment in U.S. manufacturing facilities declined due to uncertain input costs
- Reshoring complications: Some companies that considered moving production back to the U.S. reconsidered due to higher material costs
Real-World Example: Mid-Atlantic Machinery Company
A Pennsylvania-based manufacturer of industrial equipment imports specialized stainless steel tubing (HTS 7306.40) from Germany. The company needs this specific alloy for corrosion resistance in chemical processing equipment.
Before Section 232:
- Annual imports: $800,000
- Standard duty (1.9%): $15,200
- Total landed cost: $815,200
After Section 232:
- Annual imports: $800,000
- Standard duty (1.9%): $15,200
- Section 232 tariff (25%): $200,000
- Total landed cost: $1,015,200
- Additional annual cost: $200,000
The company applied for a product exclusion, arguing no U.S. producer makes this alloy in the required dimensions. A domestic steel producer objected, claiming they could produce a "similar" product. After 14 months, the exclusion was denied. The company ultimately raised prices by 8%, losing two major customers to European competitors, and reduced its workforce by 12 employees.
Recent Policy Developments and Future Outlook
Section 232 tariffs remain controversial and subject to ongoing policy discussions.
Biden Administration Actions
President Biden has maintained most Section 232 tariffs but shifted the approach:
- EU negotiation: The October 2021 tariff-rate quota arrangement with the EU marked a move toward managed trade rather than blanket tariffs
- "Polluting" steel focus: Announced efforts to coordinate with allies on carbon-intensive steel and aluminum, potentially creating a framework for differentiating tariffs based on environmental standards
- Domestic manufacturing emphasis: Paired Section 232 maintenance with investments in U.S. manufacturing through infrastructure legislation
Industry Perspectives
Domestic steel and aluminum producers argue the tariffs have been successful, pointing to:
- Capacity utilization increases (from 73% to 80% for steel) [American Iron and Steel Institute, 2022]
- Reopening of previously idled facilities
- Increased capital investment in domestic production
Downstream manufacturers and trade associations continue to advocate for:
- Tariff elimination or reduction
- Streamlined, permanent exclusion processes
- Country-specific exemptions for allies with no national security threat
- Transition to domestic production subsidies instead of tariffs
What to Expect
Section 232 tariffs are likely to remain in place with ongoing modifications:
- More country-specific arrangements: Following the EU model, additional countries may negotiate quota-based exemptions
- Exclusion process improvements: Pressure continues for a more efficient, transparent exclusion system
- Congressional oversight: Legislative proposals periodically surface to limit presidential Section 232 authority or require Congressional approval
- WTO compliance pressure: The World Trade Organization has ruled against several U.S. tariff programs, though enforcement mechanisms are limited
For U.S. businesses, the practical reality is that Section 232 tariffs should be considered a permanent feature of import cost calculations for the foreseeable future. Companies should:
- Factor these tariffs into long-term pricing and sourcing strategies
- Monitor country-specific exemption developments
- Consider domestic sourcing where economically feasible
- Maintain detailed records for potential exclusion requests
- Work with customs brokers to ensure proper classification and duty calculation
Important disclaimer: Tariff rates, country exemptions, and exclusion processes change frequently. Always verify current rates with U.S. Customs and Border Protection or a licensed customs broker before making import decisions. This article provides general information only and does not constitute legal or financial advice.
For businesses navigating complex tariff scenarios, TariffCenter.AI offers real-time tariff rate lookups, country-specific exemption tracking, and cost impact calculations to help optimize your import strategy under current Section 232 rules.
---FAQ--- Q: What is the difference between Section 232 and Section 301 tariffs? A: Section 232 tariffs are imposed on national security grounds (currently 25% on steel, 10% on aluminum from most countries), while Section 301 tariffs target unfair trade practices (primarily affecting Chinese goods with rates up to 25%). Section 232 applies to specific product categories regardless of country (with exemptions), while Section 301 is country-specific.
Q: Can I avoid Section 232 tariffs by importing through Mexico or Canada? A: No, this is illegal transshipment. Section 232 tariffs apply based on the country of origin where the steel or aluminum was melted and poured, not the last country it shipped from. U.S. Customs requires country of origin documentation, and false claims can result in penalties, seized goods, and criminal charges.
Q: How long does it take to get a Section 232 product exclusion approved? A: Historically, exclusion requests have taken 6-18 months to process, though the Commerce Department aims for faster review