Tariffs are structural

The latest turn in the U.S. metals tariff story did not simply raise rates. It changed the shape of the problem. On April 2, President Donald Trump issued a proclamation that rewrote how Section 232 tariffs apply to steel, aluminum, and copper. The new rules took effect at 12:01 a.m. Eastern on April 6. They moved many goods from a tariff on the metal content alone to a tariff on the full customs value of the imported product. They also reorganized which derivative products are covered through new tariff annexes, ending the old idea that these duties were mostly about raw metal at the dock (whitehouse.gov, troutman.com). That sounds technical until you see what “derivative products” means in practice. Under the new structure, many finished or semi-finished goods that contain steel, aluminum, or copper now face 50 percent or 25 percent duties on their full entered value, depending on where they land in the annexes. The White House also said products made abroad but entirely from American-origin metal can get a lower 10 percent rate, while goods with 15 percent or less steel, aluminum, or copper content are no longer subject to these metals tariffs. That is a planning regime, not a one-time shock. It reaches into cans, closures, wiring, cable, machinery, transport equipment, and other components that sit far downstream from a smelter or mill (whitehouse.gov, globaltradeandsanctionslaw.com, troutman.com). The reason this matters so much is that the old system was already messy. Since June 2025, importers had often been asked to separate the value of the metal inside a mixed product from the value of everything else. Lawyers and customs specialists spent months arguing over how to price the steel in a machine or the aluminum in a finished part. The April proclamation did remove that valuation puzzle. But it did so by replacing it with something blunter: tariff the whole item. That is simpler for Customs. It is harsher for anyone buying goods that use metal as one ingredient among many (globaltradeandsanctionslaw.com, troutman.com). The other big shift is that relief got narrower. The administration’s fact sheet highlights carveouts for low-metal-content goods and for products made with U.S.-origin metal, but the broader direction is toward fixed categories and fewer escape valves. Trade lawyers note that the proclamation also ends the quarterly process that had allowed more products to be added as derivative articles over time. That sounds like stability. It is really a different kind of rigidity. Companies now have to map their exposure to the tariff schedule as written, line by line, and assume that more of their bill of materials is permanently inside the tariff wall (whitehouse.gov, natlawreview.com, nmma.org). That is why “mitigation” tactics suddenly matter so much. One of the most important is the First Sale rule, a customs valuation method that can let an importer in a multi-step supply chain declare duties on the earlier factory-to-middleman price instead of the higher middleman-to-importer price. Retail Dive reported that Target disclosed using the method for qualifying direct imports in its 2025 filing. In plain English, if a manufacturer sells a good for $20 to an intermediary and the intermediary sells it for $80 to the U.S. importer, First Sale can make the duty base $20 instead of $80. When tariffs rise, that difference becomes enormous (retaildive.com, finance.yahoo.com). Congress has noticed because this is not a loophole at the margin anymore. On February 11, Senators Sheldon Whitehouse and Bill Cassidy introduced the Last Sale Valuation Act of 2026, S. 3841, to shut down what they call the “First Sale” customs loophole. The bill is still only introduced, not enacted. But the point is not whether it passes tomorrow. The point is that one of the few legal tools importers have to soften tariff costs is now under direct bipartisan attack. If tariffs are becoming structural, the workarounds are becoming political targets too (whitehouse.senate.gov, govtrack.us, gtlaw.com). There is one more reason companies cannot treat this as a temporary spike. Even when tariffs are struck down, prices do not neatly roll backward. On February 20, the Supreme Court held in *Learning Resources v. Trump* that the International Emergency Economic Powers Act does not authorize the president to impose tariffs. That opened the door to refunds on many IEEPA-based duties already paid. The Court of International Trade has since ordered broad refund action, though the scope and mechanics are still being fought over. None of that puts money back into households that already paid higher retail prices. Refunds go to importers first. Whether they ever flow through to consumers depends on contracts, competition, and timing, and many companies have already reset prices or switched sourcing under a new tariff regime (congress.gov, kelleydrye.com, troutman.com). That makes forecasting harder than the headline rate suggests. A company can face a 25 percent or 50 percent Section 232 duty on a broader set of inputs, try to lower the customs value through First Sale, watch Congress threaten that strategy, win a refund fight on a different tariff program, and still have no clean way to predict what customers will pay or when demand will crack. The tariff system