Section 232 valuation change

A tariff change that took effect on April 6 means some imported machines, auto parts, and assemblies with steel inside them can now be taxed on the price of the whole product, not just the value of the steel inside it. That sounds like a paperwork tweak, but it changes the math. A $10,000 machine with $800 worth of steel used to face the steel tariff on $800; under the new rule, the tariff can apply to the full $10,000 customs value if the product falls inside the covered list. Section 232 is the national security trade law the United States used in 2018 to put extra duties on imported steel and aluminum. Those duties sit on top of normal import tariffs and are enforced by U.S. Customs and Border Protection at the border. For years, one of the hardest parts for importers was proving how much steel or aluminum was actually inside a finished product. A January 2026 advisory recommendation to Customs and Border Protection said companies were struggling to determine and declare the metal value and even suggested using public commodity prices as a workaround. The April 2 proclamation changes that by dropping the metal-content calculation for covered products and using full customs value instead. The same proclamation also says goods that contain more than one covered metal should be charged only one Section 232 duty rate, not stacked metal by metal. The government also redrew the product list. White & Case said the proclamation added a few dozen products, removed hundreds with low metal content, and lowered rates for some goods with moderate metal content even as it broadened the valuation base. That is why South Korea’s trade ministry called the change a net reduction in administrative burden on April 9. Seoul said the number of affected tariff lines fell by 17 percent, even though some individual products could still face higher duty bills under the full-value method. South Korea’s trade minister Yeo Han-koo said the effect will differ by item, which is customs language for one product getting easier while another gets more expensive. A heavy assembly with a small amount of steel can be hit harder when the tariff is tied to the whole invoice price instead of the steel share. The change is not just about steel. The April 2 proclamation also modified Section 232 treatment for aluminum, copper, and derivative products tied to those metals, with duty rates ranging from 10 percent to 50 percent depending on the category. So the winners are importers that hated tracing the metal content line by line through supplier declarations and bills of materials. The losers can be importers whose products stay on the covered list but have low steel value relative to the total selling price, because the tax base just got much bigger.