U.S. Issues New Section 232 Tariff Orders on Steel, Aluminum, Copper and Pharmaceuticals

On April 2nd, President Trump issued two proclamations adjusting existing Section 232 tariffs on steel, aluminum and copper, and imposing new tariffs on certain patented pharmaceutical products. Here's what you need to know.

Duties to be collected on full value of the product - no longer just value of the metal content

The proclamation directs that Section 232 tariffs on steel, aluminum and copper be collected on the full value of metal articles at rates of 10%-50% depending on the relevant metal and/or the location in which the metal was melted, poured, smelted or cast. Previously, duties were only owed on the value of the metal content within certain items. This significantly increases the potential cost of duties to importers, depending on where their goods are coming from.

Lower tariffs for goods produced in the United Kingdom

For steel, aluminum and copper tariff codes listed in Annex I-A, the tariff rate will be 50% of the full product value unless the goods are produced in the U.K. with steel or aluminum that is melted, poured, smelted or cast within the U.K. In this case, the tariff would be set at 25%.

For steel, aluminum and copper tariffs codes listed in Annex I-B, the tariff rate will be 25% of the full value of the product unless the goods are produced in the U.K. with steel or aluminum that is melted, poured, smelted or cast within the U.K. In this case, the tariff would be set at 15%.

No more outright tariff exclusions for U.S. smelted, melted, poured or cast metal in derivative products

Derivative goods listed in both Annex I-A and I-B which are produced aboard using entirely U.S. melted or poured steel or U.S. smelted or cast aluminum / copper will now be subject to a 10% Section 232 tariff. Previously, any amount of U.S. smelted/melted/cast/poured metal content entitled the derivative to a total exclusion from Section 232 tariffs.

Aluminum originating from Russia and products with unknown origin still carry a 200% tariff

A 200% duty remains in place for aluminum goods listed in any of the Annexes and for which any amount of the product was smelted or cast in Russia.

Importers who are unable to list the origin of their products on their customs documents will also automatically owe a 200% tariff on the full value of the product.

Section 232 tariffs expand to pharmaceuticals

While previously only applied to metals, this recent presidential proclamation expands the Section 232 scope to the pharmaceutical sector, imposing tariffs on certain "patented pharmaceuticals and associated pharmaceutical ingredients." Generic and bio-similar pharmaceuticals are not subject to Section 232 tariffs.

Default Section 232 tariffs on in-scope pharmaceuticals are set at 100%, with the exception of companies that have (or are likely to soon have) "onshoring plans" approved by the Secretary of Commerce". These companies will have tariffs set at 20%, set to increase to 100% on April 2, 2030. Companies eligible to be entered in pharmaceutical pricing agreements will have tariffs set at 0% until January 20, 2029 per terms listed in Annex II of the presidential proclamation. Products from the E.U., Japan, Switzerland, and Liechtenstein are subject to a 15% tariff, and products from the U.K. are subject to a 10% tariff.

All of the above tariff rates will go into effect on July 31, 2026 for companies listed in Annex III, and on September 29, 2026 for all others.

Supply chain mapping is essential for proper calculation of Section 232 tariffs

Not knowing which countries your goods are coming from or whether they contain metal that has been smelted / melted / cast in either the U.K. or the United States can mean the difference between paying between 10% and 200% of a product's full value in tariffs.

For example: an aluminum derived product listed in Annex I-A valued at $500 could owe the following in Section 232 tariffs depending on the amount of information the importer has collected via supply chain mapping:

• IF origin is unknown: additional tariff owed is $1000

• IF origin is known and is not the United Kingdom, additional tariff owed is $250

• IF origin is known and aluminum is smelted, cast and product is produced within the U.K., additional tariff owed is $125

• IF origin is known, derived product is produced abroad using entirely U.S. smelted aluminum, additional tariff owed is $50.

Don't leave money on the table

Section 232 tariffs are complex, pricey and subject to change depending on the machinations of this administration. Supply chain mapping is essential for ensuring your company is properly calculating your Section 232 exposure and is not paying more than you owe. To learn more about how Sourcemap can support Section 232 compliance, speak to our team of experts today.