Section 232 Tariffs: Steel, Aluminum, Auto & Copper Rates

Section 232 of the Trade Expansion Act of 1962 authorizes the President to investigate whether imports of specific goods threaten US national security. If the Secretary of Commerce finds a threat, the President has 90 days to act, with options including tariffs, quotas, or negotiated agreements. Unlike Section 122's 150-day cap, Section 232 tariffs have no statutory expiration date. The current Section 232 tariffs represent the most expansive use of this authority since its enactment. Steel and aluminum tariffs were first imposed in 2018 (at 25%) and increased to 50% in June 2025. Copper, lumber, and additional products were added in subsequent proclamations. The coverage now extends to virtually every structural material and several finished product categories. The rationale for Section 232 tariffs is domestic production capacity. The Commerce Department findings cited declining US steel and aluminum production as a threat to defense industrial base capacity — the ability to produce armor plate, aircraft aluminum, and other military-critical materials in wartime. Whether this rationale is legally sufficient has been contested in court (Transpacific Steel v. United States, 2021 Federal Circuit, upheld the President's authority), but the legal basis is currently settled. The practical effect: Section 232 applies to steel, aluminum, copper, lumber, automobiles, auto parts, and semiconductors from every country — including USMCA partners Canada and Mexico for goods that do not qualify for duty-free USMCA treatment. There is no country-of-origin exemption except for the UK's partial exemption on steel and aluminum.

Steel (HTS Chapters 72 and 73): 50% since June 4, 2025. The rate was raised from 25% (imposed February 12, 2025) following the Trump administration's June 2025 proclamation expanding Section 232 coverage. UK steel has a partial exemption at 25%. This applies to raw steel mill products including hot-rolled coil, cold-rolled coil, coated steel, plate, structural shapes, pipe and tube, and wire rods. Downstream steel articles from China face a different rate under Section 301 (25%), but raw steel from any country faces S232 50%. Aluminum (HTS Chapter 76): 50% since June 4, 2025, matching steel. UK aluminum carries 25%. Covers primary aluminum ingot, billets, slab, and certain semi-fabricated forms. Aluminum-containing products (beverage cans, aerospace structures) may or may not be classified as "aluminum articles" depending on their HTS classification. Copper (HTS Chapter 74): 50% since June 4, 2025. Covers semi-finished copper including cathodes, wire rod, tube, and sheet. Applies globally. Automobiles and auto parts (HTS Chapter 87): 25% since April 3, 2025. Covers passenger vehicles, light trucks, and original equipment auto parts. USMCA-qualifying vehicles from Canada and Mexico are exempt from this rate. Lumber (HTS Chapter 44): 10% since April 3, 2025. Covers softwood lumber and timber. Kitchen cabinets and certain value-added wood products may face higher rates under separate classifications. Semiconductors (HTS 8541 and 8542 subheadings): 25% since January 15, 2026. Narrowly targeted at advanced semiconductor articles — not all integrated circuits, but advanced chips and products containing them.

The most commercially significant interaction between Section 232 and other tariff authorities is the S122 exclusion. Section 232-covered products are specifically exempt from Section 122. This is not an automatic consequence of how tariffs interact — it was a deliberate policy decision implemented in the Section 122 Federal Register notice. The logic: Section 232 products already carry their own surcharge at rates higher than Section 122 in most cases (50% for steel vs. 15% for S122). Imposing S122 on top would create a 65% steel tariff, which the administration apparently considered excessive. The S122 exclusion ensures that Section 232 products face the S232 rate (the higher charge) rather than an accumulation. In practical terms: a steel importer from Germany pays 50% S232. They do not also pay 15% S122. Their total tariff is 50% plus MFN (which for most steel products is very low, often below 1%) plus MPF. An auto parts importer from Japan (S232-covered) pays 25% S232, not 25% + 15% = 40%. This creates a meaningful asymmetry between S232 products and non-S232 products. A $100,000 steel order from Germany: $50,000 S232, MPF capped at $651.50. A $100,000 electronics order from Germany: $0 S232, $15,000 S122, MPF $346.40. The steel importer pays more in absolute dollar terms, but the S122 exclusion prevents the cumulative burden from reaching 65%. For manufacturers who source both S232 products (steel, aluminum) and non-S232 components (electronics, machinery parts), understanding this interaction is essential to accurate landed cost modeling.

For Chinese goods subject to Section 232, the stacking interaction is distinct. Section 301 China tariffs apply to Chinese goods on top of Section 232, but the Section 301 rates for Chinese steel downstream articles (25% since September 2024) are structured differently from the Section 232 rates on raw steel. Raw steel and aluminum from China: these face Section 232 (50%) because they are raw materials under HTS Chapters 72-73 and 76. Section 301 does not independently apply to raw steel — those goods are covered by S232. So the effective rate for raw steel from China is MFN ~0-1% + S232 50% + MPF. Downstream steel articles from China (steel furniture, steel pipes used in construction, steel fasteners manufactured in China): these face Section 301 at 25% (the 2024 increase rate for Chinese steel downstream articles). They are not classified as "steel articles" under S232 — they are manufactured products that happen to contain steel. So the calculation is MFN + S122 (if applicable) + S301 25%. The S122 rate may or may not apply depending on whether the specific product falls into an S122-exempt category. For semiconductors from China: both S232 (25%) and S301 (50%) may apply to certain products in HTS 8541-8542, but the higher rate governs. Since S301 at 50% exceeds S232 at 25%, the effective combined rate would be S232 + S301 = 75%, plus MFN. This represents one of the most extreme tariff accumulations in the current regime. The practical advice: identify your specific HTS code and trace which tariff authorities govern it before calculating your landed cost.

Section 232 tariffs impose costs not just on direct importers of steel, aluminum, copper, lumber, and autos, but on the entire supply chain that uses these materials as inputs. A refrigerator manufacturer who buys domestically produced steel from US mills does not directly pay the tariff — but the domestic mills raised prices to match the tariff-adjusted import parity price. The tariff floor raises domestic prices throughout the economy. Economic studies estimate that the steel tariffs increase domestic steel prices by approximately 20-25% above pre-tariff levels, even accounting for the fact that much US steel is domestically sourced. This reflects the market-clearing effect: importers who would have bought foreign steel at the lower price now compete harder for domestic supply, bidding up prices. For downstream manufacturers using steel as an input — appliances, construction equipment, auto parts, HVAC systems, agricultural machinery — the Section 232 tariffs function as an input cost tax. A company spending $2 million per year on steel faces an additional $400,000-$500,000 in input costs, which must be recovered through higher prices, reduced margins, or productivity gains. The aluminum tariff has similar downstream effects on aerospace, beverage packaging, and automotive parts. Aluminum-intensive auto parts have faced significant cost increases since 2025, contributing to higher vehicle prices. There is no sunset provision for Section 232. Businesses making long-term investment decisions in affected industries must plan for these rates as indefinite, not temporary.