Trump Admin Adjusts Tariffs for “Derivative Products” Containing Steel, Aluminum and Copper

On April 2, 2026, the Trump administration took long anticipated action to adjust how tariffs apply to “derivative products” containing steel, aluminum and copper. Under the new proclamation, issued under Section 232 of the Trade Expansion Act of 1962, most derivative products will now face a 25% tariff on the full value of the imported product. This replaces the earlier approach where these products faced a 50% tariff on their metal content and a separate tariff on their non-metal content. These changes took effect on April 6, 2026.

Imports consisting entirely or almost entirely of steel, aluminum or copper remain subject to the 50% tariff. While the rate for most derivative products drops from 50% to 25%, subjecting the full value of covered products to the 25% rate will result in higher tariffs on most impacted products. However, a smaller set of derivative products containing significant amounts of metal will see an effective decrease in tariffs.

In addition, the proclamation subjects “Certain metal-intensive industrial equipment and electrical grid equipment” to a lower 15% tariff through 2027, “to accelerate the massive industrial base buildout currently underway across the United States” according to a White House fact sheet.

Products made abroad with U.S. steel, aluminum or copper will also be subject to lower tariffs of 10%. Products made of 15% or less steel, aluminum or copper will no longer be subject to Section 232 metals tariffs; however, these products will remain subject to other applicable tariffs.

Imports of certain steel and aluminum products from the United Kingdom will be subject to 25% or 15% tariffs, provided that at least 95% of the metal they contain was smelted, cast, melted or poured in the United Kingdom (UK). Tarriff reductions made to implement prior agreements with the UK, European Union, Japan and South Korea in accordance with the WTO Agreement on Trade in Civil Aircraft also remain in effect. Russian-origin aluminum remains subject to a 200% tariff.

The inclusions process for adding new derivatives to the list of covered products has been terminated with the secretary of commerce and U.S. Trade Representative now authorized to jointly make changes to specific products subject to these tariffs.

General Structure

The proclamation includes several annexes to define the applicability of 232 tariffs on steel, aluminum, copper and their derivative products. This includes:

• Annex I-A defines the list of steel, aluminum and copper articles, including certain derivatives, subject to a 50% tariff on the full customs value of the product.
• Annex I-B defines the list of steel and aluminum derivatives, including certain copper articles, subject to a 25% tariff on the full customs value of the product.
• Annex II defines the list of derivative articles removed from the scope of Section 232 tariffs on steel, aluminum and copper articles.
• Annex III defines the list of derivative articles eligible for a temporary reduced tariff rate through Dec. 31, 2027, after which those articles revert to the 25% rate under Annex I-B.
• Annex IV defines certain metal content thresholds under which covered articles outside Chapters 72 – 76 of the Harmonized Tariff Schedule of the United States (HTSUS) are exempt from Section 232 tariffs on steel, aluminum and copper articles.
• Drawback is available only under certain conditions for articles defined in Annex I-B and Annex III.

Major Changes

Product Valuation and Tariff Burden Calculation

Section 232 tariffs on steel, aluminum and copper articles, including derivative products, are now calculated based on the full customs value of the covered product, rather than the value of the metal content. While this change is negligible for primary metal articles, it represents a significant increase in the tariff burden faced by covered metal derivative products.

The proclamation establishes narrow exceptions to this process. As defined in Annex IV, articles classified outside of HTSUS Chapters 72–76 are exempt from Section 232 metal tariffs if the weight of the applicable metal is less than 15% of the total weight of the imported article. If the metal content of the article clears the 15% weight threshold, then it is subject to Section 232 tariffs based on the full customs value. Articles within HTSUS Chapters 72–76 are not eligible for this exemption, regardless of metal content weight, as they are subject to tariffs based on their full customs value.

Separately, goods containing more than one covered metal are subject to the applicable Section 232 tariff only once, rather than once per metal present in the product.

Tariff Rate and Scope Adjustments

The proclamation consolidates Section 232 tariff rates into tiers based on the type of covered product and country of origin. The base duty rate for steel, aluminum and copper articles and their derivatives, as listed in Annex I-A, is 50% based on the full customs value of the product. The tariff rate for certain steel and aluminum derivatives and certain copper articles, as listed in Annex I-B, is 25% based on the full customs value of the product. Annex II removes several previously covered derivatives from the scope of Section 232 metal tariffs.

Certain countries receive different rates based on existing agreements and relations with the United States. The United Kingdom receives a preferential rate of 25% for steel or aluminum articles listed in Annex I-A, and 15% for steel or aluminum articles listed in Annex I-B. However, this preferential rate only applies when at least 95% of the applicable metal was smelted, cast, melted or poured in the UK, representing a strict origin of metal test. Russian-origin aluminum is still subject to a 200% tariff, as established in February 2023. This proclamation does not supersede actions implementing prior agreements with the UK, European Union, Japan, South Korea (Republic of Korea) or any other U.S. trading partner to reduce Section 232 tariffs on aluminum, steel or copper derivative articles that fall under the WTO Agreement on Trade in Civil Aircraft.

The duty rate for derivatives with steel, aluminum or copper content composed entirely of metal smelted, cast, melted or poured in the United States is 10% based on the full customs value of the product.

Certain steel and aluminum derivative articles, as listed in Annex III, are subject to a reduced rate through Dec. 31, 2027. The reduced rate is calculated using the articles’ HTSUS Column 1 Duty Rate. When the Column 1 Duty Rate exceeds 15%, no additional Section 232 metals tariff applies. When the Column 1 Duty Rate is less than 15%, the combined tariff burden of the Column 1 Duty Rate and Section 232 metals tariff shall be 15%. For example:

• A product covered by the Section 232 metals tariff and subject to a Column 1 Duty Rate of 20% would face a combined burden of 20%.
• A product covered by the Section 232 metals tariff and subject to a Column 1 Duty Rate of 10% would face a combined burden of 15%.
• A product covered by the Section 232 metals tariff and subject to a Column 1 Duty Rate of 0% would face a combined burden of 15%.

However, this relief expires starting Jan. 1, 2028, when all articles defined in Annex III revert to the 25% rate applied to Annex I-B articles.

Termination of Inclusions Process

Prior to this proclamation, the administration maintained a formal public process through the Department of Commerce through which domestic producers could petition to add new derivative articles to the scope of Section 232 metals tariffs. This process permitted the submission of petitions, a feedback window for public comments and formal determinations posted to the public in the Federal Register. However, the process has been terminated by this proclamation, effective April 6, 2026.

The proclamation replaces this inclusions process with a joint rolling authority operated by the secretary of commerce and U.S. Trade Representative (USTR). The two agency heads may add derivative articles to the scope of Section 232 metals tariffs whenever they jointly determine that the import of those articles undermines efforts to combat the national security threats in the underlying Section 232 metals tariff proclamations. The notice will be published in the Federal Register, but it does not require a formal petition, public comment period or prescribed timeline. Additions to the list of covered derivatives take effect on the date of the finding or the first practicable date thereafter. The secretary of commerce and USTR may reverse or modify inclusions decisions. Any derivative product added through this process is subject to the 25% tariff rate applicable to Annex I-B articles, unless a comparable article already exists in Annex I-A, in which case the 50% duty applies.

As a part of this new inclusions process, metal containers are now included in the scope of Section 232 metals tariffs, even if they are filled with items that would not be covered by steel, aluminum, copper or derivative product tariffs.

Offsets and Limitations

The proclamation tightens conditions for importers to claim manufacturing drawbacks. Drawback is now only available for covered articles that meet several conditions:

• The article is listed in Annex I-B or Annex III;
• The article is not subject to an antidumping or countervailing duty order (AD/CV), regardless of whether the article is from the country or countries listed in the AD/CV order;
• The article is a product of Trade Agreement Partners, which includes the UK, European Union, Japan, South Korea (Republic of Korea), Mexico, Canada and any trading partner with which the United States concludes a final Agreement on Reciprocal Trade; and
• The metal content of the article is composed entirely of metal that was smelted, cast, melted or poured in a Trade Agreement Partner Country.

Foreign Trade Zone (FTZ) treatment has been similarly restricted. Covered articles admitted into U.S. FTZs on or after April 6, 2026, must enter under “privileged foreign status” rather than “domestic status.” The domestic status classification allowed goods to be manipulated or transformed within the zone before final entry for consumption, by which importers could alter the classification of a product and thus reduce tariff exposure. Under privileged foreign status classification, tariff treatment is fixed at time of entry into the zone.

Next Steps

The proclamation represents a significant shift in the tariff burden and valuation process under Section 232 metal duties. Impacted stakeholders should familiarize themselves with the annexes put forth within the proclamation to determine the applicable rate and potential for exemption or relief. The shift to a full customs valuation assessment will likely increase the landed costs for covered goods. Existing drawback claims and FTZ classification strategies should be reviewed following the tightened conditions surrounding those offset mechanisms. Federal agencies such as U.S. Customs and Border Protection and the Department of Commerce may soon issue additional guidance to further implement the requirements of this proclamation.

In the wake of this restructuring of Section 232 tariffs on steel, aluminum, copper materials and their derivative products, our team stands ready to help impacted stakeholders navigate their tariff burden and risk assessment process. We can help respond to issues such as:

• Conducting tariff impact assessments on supply chains;
• Diversifying or restructuring supply chains in anticipation of potential tariff measures; and
• Developing risk-mitigation strategies, such as tariff engineering, country-of-origin review or leveraging existing free trade agreements.

For additional insights into the Trump administration’s trade agenda, or assistance in navigating this rapidly evolving environment, please contact a member of the Brownstein team.

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THIS DOCUMENT IS INTENDED TO PROVIDE YOU WITH GENERAL INFORMATION REGARDING ADJUSTED TARIFFS ON METAL PRODUCTS. THE CONTENTS OF THIS DOCUMENT ARE NOT INTENDED TO PROVIDE SPECIFIC LEGAL ADVICE. IF YOU HAVE ANY QUESTIONS ABOUT THE CONTENTS OF THIS DOCUMENT OR IF YOU NEED LEGAL ADVICE AS TO AN ISSUE, PLEASE CONTACT THE ATTORNEYS LISTED OR YOUR REGULAR BROWNSTEIN HYATT FARBER SCHRECK, LLP ATTORNEY. THIS COMMUNICATION MAY BE CONSIDERED ADVERTISING IN SOME JURISDICTIONS.