Section 232: How the April 2 Proclamation Redraws Tariffs on Steel, Aluminum, and Copper

On April 2, 2026, President Donald Trump signed a presidential proclamation that rebuilds the entire architecture of Section 232 tariffs on steel, aluminum, and copper entering the United States. The changes took effect on April 6, 2026, and they are the most significant overhaul of the metals tariff regime since it launched in 2018.

For exporters shipping out of Mexico — particularly anyone embedded in manufacturing supply chains integrated with the U.S. — this is not a minor technical tweak. It is a structural re-engineering of how the duty is calculated, what gets taxed, and under what conditions tariffs apply across a huge range of products that contain these metals.

The fundamental change: from "metal value" to "full customs value"

Through April 5, 2026, Section 232 tariffs on derivative products — finished goods that contain steel, aluminum, or copper but aren’t made entirely of them — were assessed on the value of the metal content inside the article. That created enormous operational complexity: importers had to break out, on the books, the value of the metal versus the value of everything else in the product, entry by entry.

Starting April 6, 2026, the new proclamation rips that methodology out at the root. Tariffs now apply to the derivative product’s full declared customs value, with different duty tiers depending on HTSUS classification and how metal-intensive the article is.

In practical terms: if a product used to be worth $1,000 with $200 of steel content, the 50% tariff hit those $200 — $100 of duty. Under the new methodology, that same product pays the tariff on the full $1,000. That can multiply the effective tariff cost by five or more.

The four annexes that reorganize everything

The proclamation sorts the affected products into four annexes, each with its own rules:

Annex I-A — 50% tariff on full value. Covers products made primarily of the relevant metal: primary steel products, pipe and rolled products, aluminum wire, bars, plates, castings, refined copper and its alloys, plus certain high-metal-intensity derivatives. Reduced rates apply to UK products and to goods made entirely from U.S.-origin metals.

Annex I-B — 25% tariff on full value. Holds most of the derivative products added in June and August 2025. It includes machinery articles from Chapters 84 and 85 of the harmonized system, plus steel-intensive industrial goods from Chapters 86 and 87. This is the annex where the methodology change bites hardest operationally.

Annex II — Full exclusion. Products listed here were removed from the Section 232 regime entirely. They no longer pay these tariffs.

Annex III — Temporary 15% tariff. Through December 2027, a 15% all-in rate (MFN plus Section 232) applies to machinery and technologies deemed essential to the U.S. defense industrial base. This partially implements the recent EU–U.S. trade framework. After December 2027, the rate steps up to 25%.

The Mexico angle: drawback as an opportunity

One of the most relevant points for exporters shipping from Mexico is a provision that has flown under the radar in most coverage: the availability of manufacturing drawback under 19 U.S.C. 1313 for certain specific products.

Drawback lets you recover duties paid when the imported product is later exported, or used to manufacture goods that are exported. Under the new proclamation, the benefit is available for products that meet these conditions:

1. They are listed in Annex I-B or Annex III.

2. They are not subject to antidumping or countervailing duty orders.

3. They originate in trading partners with active agreements — including Mexico, Canada, the UK, the European Union, Japan, Korea, and any country with a finalized Agreement on Reciprocal Trade (ART). 4. The aluminum or copper content must have been smelted in a partner country, and the steel content must have been melted and poured in a partner country.

That provision explicitly recognizes Mexico’s special standing in the North American trade regime. Exporters who can properly document the origin of their metals — melt and pour for steel, smelt and cast for aluminum and copper — hold a competitive edge over exporters from countries with no active trade agreement with the U.S.

Low metal content exclusion: the 15% rule

Another important detail: articles listed in Annex I-B or Annex III — except those classified in Chapters 72, 73, 74, or 76 of the harmonized system — are not subject to Section 232 tariffs when the weight of the applicable metal is less than 15% of the imported product’s total weight.

This "low metal content exclusion" matters to exporters of manufactured goods from Mexico where steel or aluminum is a minor component of the finished product. If an article combines more than one covered metal, you use the aggregate weight of the listed metals to test against the 15% threshold.

For exporters of light machinery, metal furniture, appliances, and manufactured goods with secondary metal components, this exclusion can be the difference between staying competitive and getting priced out of the U.S. market.

No-stacking: a welcome simplification

The proclamation sets a non-stacking rule: products listed in Annex I-A, I-B, or III that contain more than one of the covered metals pay the applicable rates once — not once per metal present. That was a gray zone under the old regime, and clearing it up gives importers real operational certainty.

The broader context: pressure on the Mexico–U.S. relationship

None of this is happening in a vacuum. It lands amid rising bilateral trade pressure. In recent days, the U.S. Trade Representative (USTR) published observations in its trade barriers report questioning specific Mexican measures — including Mexico’s customs reform and its potential use as a non-tariff barrier.

In parallel, the Mexican government is running an active investigation into roughly 400 companies for alleged transshipment and undervaluation schemes tied to steel imports. In a more protectionist world, governments are tightening their scrutiny of how material enters, at what declared value, and under what documented origin.

For companies operating by the book, that cuts two ways: it reduces the distorted competition that squeezes margins, and it raises the documentation bar that every serious trade operation has to clear.

What exporters shipping from Mexico should do now

Against this new landscape, companies with U.S. market exposure need to move on several fronts at once:

1. Immediate HTSUS classification audit. Go through every tariff code (fracción arancelaria) you export to the U.S. and determine whether it falls in Annex I-A, I-B, II, or III. That classification literally decides how much duty you’ll pay.

2. Metal origin documentation. Build robust processes to document where your steel was melted and poured, and where your aluminum and copper were smelted and cast. Without that paper trail, there is no drawback and no reduced rate.

3. Metal content analysis. For products where metal is a secondary component, calculate precisely whether you clear the 15% threshold. That single determination can take some products out of the tariff entirely.

4. Pricing structure review. Model what the methodology change — metal value versus full value — does to your export margins. Adjust pricing with U.S. customers where necessary and where you can.

5. Drawback strategy. If you run integrated import-and-re-export operations, evaluate whether the drawback mechanism — now available under specific conditions — is worth pursuing.

6. Watch the bilateral relationship. With the USMCA review approaching and trade tensions rising, keeping a constant read on the regulatory environment is now a strategic function, not an operational one.

Compliance as a competitive advantage

The underlying message in all of this: documentation, traceability, and technical compliance have stopped being administrative chores and become real competitive advantages. Companies that can prove origin, composition, production process, and documentary consistency will get preferential rates, drawback, and exclusions. Those that can’t will watch their cost structure quietly erode while better-organized competitors pull ahead.

At FreightSpot we track these changes closely because they hit our importing and exporting clients directly. If your company does business with the U.S. and you want to understand exactly how this proclamation lands on your specific products, our team can run the analysis classification by classification.

International trade in 2026 demands more precision, not less. And precision — unlike a tariff — isn’t paid at the border. It’s built in advance.

Sources

The White House — April 2026

White & Case LLP — April 2026

Global Trade & Sanctions Law — April 2026

National Law Review — April 2026

Baker Donelson — April 2026

Wiley Law — April 2026

GHY International — April 2026

CONADIAC México — April 2026

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