On February 10, 2025, President Trump signed a proclamation implementing significant changes to import tariffs on steel and aluminum products under Section 232 of the Trade Expansion Act of 1962.
- Effective March 12, 2025, a 25% tariff will apply to all steel and aluminum imports, eliminating previous country exemptions and alternative tariff agreements.
- No product exclusions will be granted—the Department of Commerce will no longer accept exclusion requests.
- Derivative products made from imported steel and aluminum will now be subject to tariffs, with further details to be published in the Federal Register.
- U.S. Customs and Border Protection (CBP) will increase enforcement, imposing maximum penalties for tariff evasion and misclassification.
- No duty drawbacks will be available for tariffs under the updated Section 232 policy.
Full text below.
What Tariffs were Announced?
February 10, 2025 - President Trump signed a proclamation making significant changes to import tariffs on steel and aluminum products under Section 232 of the Trade Expansion Act of 1962 .
Effective March 12, 2025, at 12:00 AM Eastern Time, a 25% tariff will be imposed on all steel and aluminum imports under Section 232. This proclamation revokes existing alternative tariff agreements with countries and regions including Argentina, Australia, Brazil, Canada, Mexico, the European Union, the United Kingdom, Japan, and South Korea. Steel and aluminum from these countries will be subject to the same 25% tariff.
Major Differences from the March 2018 Proclamation:
Increased Tariffs and No exemptions
- The tariff on aluminum imports will be increased to 25%, while the tariff on steel remains at 25%.
- Previous alternative tariff agreements, including absolute quotas, tariff-rate quotas, and country exemptions, are revoked. Except for Russia, which faces a punitive tariff of 200%, all other countries will be subject to a 25% tariff.
No Product Exclusions
- The product-specific exclusion process under Section 232 is immediately halted, and the application website is currently disabled. The Department of Commerce is instructed not to consider or approve any exclusion requests from February 11, 2025, onwards. However, previously approved product exclusions will remain valid until their expiration date or until the excluded product quantity is fully imported, whichever comes first.
Inclusion of Derivative Products
- Starting March 12, 2025, certain derivative steel and aluminum products (yet to be defined) will be subject to Section 232 tariffs. The list of these derivative products will be published in the Federal Register. Derivative products made from steel melted and poured in the U.S. or aluminum extruded in the U.S. will not be subject to the expanded Section 232 tariffs. For all other derivative products, the new tariffs will be assessed based on the value of the underlying steel.
Procedure for Including Derivative Products
- Within 90 days of the proclamation date (by mid-May 2025), the Department of Commerce must establish a procedure to include additional derivative steel products under Section 232 tariffs. Upon receiving a request from domestic producers or industry associations, the Department must determine within 60 days whether to include the derivative products under Section 232 tariffs.
Enhanced CBP Oversight
- The proclamation directs U.S. Customs and Border Protection (CBP) to enhance oversight to prevent tariff evasion through misclassification of steel products. If CBP finds misclassification leading to unpaid tariffs, it is instructed to assess the maximum monetary penalties allowed by law without considering any mitigating factors.
No Duty Drawbacks
- No duty drawbacks will be provided for the expanded Section 232 tariffs corresponding to exports.
Most Affected Countries
Top Five Countries for U.S. Steel Imports (in metric tons)
Top Five Countries for U.S. Aluminum Imports (in metric tons)
Canada, the U.S.'s northern neighbor, will be the most affected. Canada is the largest source of U.S. steel imports, and nearly 50% of U.S. aluminum imports come from Canada. However, Canada is also the largest export market for U.S. steel and aluminum, followed closely by Mexico. Given the highly integrated supply chains within the USMCA region, manufacturing sectors, especially in the automotive industry, products can cross borders multiple times during production. Steel and aluminum are fundamental to many manufacturing products, so it's unsurprising that the U.S., Canada, and Mexico are each other's top import and export partners
Considerations for Manufacturers
Manufacturers are currently focused on which derivative products will be included under Section 232 and the potential countermeasures other countries, particularly Canada and Mexico, might take. If your supply chain may be affected by Section 232 or if you have questions about product classification, please contact our experts.
