Section 232 in 2026: Why Your Supplier's Price Went Up, and Whether It Should Have
Section 232 duties now apply to the full customs value of imported parts, not just the metal content. If metal was less than half your part's value, your cost went up even though the rate was cut in half. Here's what changed and what to check.
If you buy stampings, castings, extrusions, or molded parts with metal in them, you have probably received a price increase letter this year that cited "tariffs." Maybe more than one. The question worth asking is not whether tariffs went up. It is whether the increase you were handed matches what actually changed.
For a lot of parts, it does not. Some parts should have gone down. A few should have come off the tariff rolls entirely.
Here is what changed, in the terms a purchasing manager needs rather than the terms a customs attorney uses.
Last verified: September 2, 2026
The single biggest change: duty is now assessed on the whole part
Before April of this year, when you imported a derivative product — a bracket, a housing, a fitting, something manufactured from steel or aluminum rather than being a raw mill product — the Section 232 duty applied only to the value of the metal in it. Your broker split the customs value into metal content and everything else, and the tariff hit only the metal portion.
That method is gone. Effective 12:01 a.m. Eastern on April 6, 2026, Section 232 duties apply to the full customs value of the imported article, derivatives included. There is no more splitting the line.
At the same time, the rate structure was rebuilt into two tiers:
| What it is | Rate | Applied to |
|---|---|---|
| Articles wholly of steel, aluminum, or copper | 50% | Full customs value |
| Derivative products substantially made of those metals | 25% | Full customs value |
Read those two changes together and you get the counterintuitive part. The derivative rate was cut in half, from 50% to 25%. But the base it applies to more than doubled for many parts. Whether your cost went up or down depends entirely on how metal-heavy the part was.
The rule of thumb: was metal more than half the declared value?
Work the arithmetic and a clean threshold falls out.
Under the old rules, your duty was 50% of the metal content. Under the current rules, it is 25% of the full customs value. Those two numbers are equal when the metal content was exactly half the declared value of the part.
If metal was more than half your part's customs value, your Section 232 duty went down. If metal was less than half, it went up.
Two examples on a part landing at $10.00.
A metal-light part. Say the metal content was declared at $4.00 of the $10.00 value, with the rest being labor, tooling amortization, coatings, and freight. Old duty: 50% of $4.00, or $2.00. Current duty: 25% of $10.00, or $2.50. Your duty rose 25% even though the headline rate was cut in half.
A metal-heavy part. Same $10.00 part, but metal content was $8.00. Old duty: 50% of $8.00, or $4.00. Current duty: 25% of $10.00, or $2.50. Your duty fell by 37%.
That is the same policy change producing opposite outcomes on two parts sitting in the same bin rack. If a supplier sent you a blanket increase across a mixed commodity book, some of those line items deserve a conversation.
A necessary caveat: this is a simplification. It sets aside MFN duty, country-specific adjustments, and the preferential rates below. It is a screening tool for finding the lines worth auditing, not a substitute for a landed cost calculation with your broker.
The carve-out most buyers have not checked
Buried in the April action is a de minimis provision that is worth real money to the right company. Articles classified outside Chapters 72, 73, 74, and 76 are removed from Section 232 metals coverage when the subject metal is less than 15% of the article's weight. If the part appears on more than one metal list, the aggregate weight of the listed metals is what counts.
Think about what that covers. A molded plastic housing with threaded steel inserts. An assembly that is mostly polymer, glass, or electronics with a metal bracket or fastener set. Parts like these were swept into derivative coverage during the 2025 expansions and, for many of them, that coverage is now gone.
More broadly, the April proclamation removed hundreds of low-metal-content products from the tariff lists while adding a few dozen new ones. Both directions matter. Something you have been paying duty on may be out of scope. Something you assumed was clear may not be.
Almost nobody has gone back and re-checked. Classifications get set once and then inherited quarter after quarter, and the annexes changed underneath them.
Which tier applies to your part
Four questions, in order.
- Is the part classified in Chapter 72, 73, 74, or 76? These are the mill products and articles wholly of steel, aluminum, or copper. If yes, expect 50% on full customs value.
- If not, is the metal less than 15% of the article's weight? If yes, the part falls outside Section 232 metals coverage.
- Is it a listed derivative? Derivative coverage now reaches well past the metals chapters into tools, machinery, electrical equipment, railway, and vehicle classifications. If listed, expect 25% on full customs value. If your part shows up on more than one of the three metal lists, it pays only one of the three tariffs, not stacked duties.
- Does it qualify for a preferential rate? Several are available, and this is where sourcing decisions get made.
The 85% rule rewards domestic metal
The June 1, 2026 proclamation, effective June 8, lowered the U.S.-content threshold for preferential treatment from 95% to 85%. A derivative product manufactured abroad now qualifies for the 10% rate if at least 85% of its steel was melted and poured, or its aluminum or copper smelted and cast, in the United States. The same 85% threshold applies to the USMCA provision.
That ten-point drop is larger than it sounds. Hitting 95% domestic metal content is a difficult specification for a lot of parts. Hitting 85% is achievable on plenty of them, and it is a specification you can write into a purchase order and audit through mill certs.
Other preferential treatments currently in effect: certain metal-intensive industrial and electrical grid equipment carries a temporary 15% combined minimum rate through December 31, 2027. Agricultural equipment such as combines and harvesters moved from 25% to 15%. Qualifying U.K.-origin material receives reduced rates. Russian-origin aluminum and derivatives containing Russian-smelted or cast aluminum remain at 200%.
Note also that the quarterly inclusions process that let domestic producers petition to add derivative products was terminated in April, though the authority to expand coverage on a rolling basis was retained. Coverage can still grow. It just will not follow a predictable calendar anymore.
What to do about it
Three things, in priority order.
Re-verify classification on your top imported spend. Every rate discussed here turns on the Harmonized Tariff Schedule code, and nothing above resolves a specific part without one. Your top twenty imported line items are where the money is.
Ask suppliers to show their work. A supplier passing through a tariff increase should be able to identify the HTS code, the applicable annex, and the rate. If they cannot, the increase may be a general cost-recovery move wearing a tariff label.
Price the domestic option again. The gap has moved twice this year, and the 85% threshold changes the math on hybrid sourcing strategies that did not pencil out under the old rules.
What is still unsettled
Two things to watch. At the July 2026 USMCA review, the administration declined to extend the agreement in its current form, and the partners are still discussing whether to modify it, let it expire, or terminate it. The preferential treatment for USMCA-qualifying goods rests on that framework.
Section 232 also continues expanding into new categories, with drones taking effect September 3, 2026. The program has not settled, and planning as though it has is a mistake.
Frequently asked questions
Do I pay the tariff on the whole part or just the steel in it?
On the whole part. Since April 6, 2026, Section 232 duties apply to the full customs value of the imported article, including derivatives. The earlier method of splitting value between metal and non-metal content was eliminated.
The derivative rate dropped from 50% to 25%. Why did my cost go up?
Because the base it applies to changed. If metal was less than half of your part's declared customs value, the smaller rate on the larger base produces a higher duty.
My part is mostly plastic with a few metal inserts. Am I still covered?
Possibly not. Articles outside Chapters 72, 73, 74, and 76 fall outside coverage when the subject metal is under 15% of the article's weight. Confirm against your specific classification.
How much U.S. metal content do I need for the preferential rate?
85%, melted and poured for steel or smelted and cast for aluminum and copper, effective June 8, 2026. The prior threshold was 95%.
About Chapman Smith
Chapman Smith Corporation has sourced steel coil, stainless, aluminum extrusions, castings, and molded parts for OEM manufacturers since 1997, out of Warsaw, Indiana. We work as an extension of our customers' purchasing departments, which lately has meant a lot of time spent on exactly this question.
If you want a second set of eyes on your part classifications against the revised annexes, send us your top imported line items and we will take a look. It is the kind of review that occasionally turns up a part that should not be carrying duty at all.
This article is general information, not customs or legal advice. Tariff treatment depends on the specific HTS classification, country of origin, and entry date for each part. Confirm your position with your customs broker or trade counsel.
