What is Section 232 and how does it justify steel and aluminum tariffs?
Section 232 of the Trade Expansion Act of 1962 authorizes the President to impose tariffs or quotas on imports that threaten national security. The Department of Commerce conducts an investigation to determine whether specific imports pose such a threat, and the President has broad discretion to act on the findings.
In 2018, the Commerce Department concluded that steel and aluminum imports threatened national security by undermining domestic production capacity needed for defense and critical infrastructure. The investigation found that global overcapacity, driven largely by Chinese overproduction, had depressed prices and threatened the viability of U.S. producers.
Based on these findings, the President imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports in March 2018. The aluminum rate was subsequently raised to 25% in 2025, bringing it in line with the steel rate.
Which products are covered by Section 232 tariffs?
Section 232 steel tariffs cover products classified under HTS chapters 72 (iron and steel) and 73 (articles of iron or steel). This includes flat-rolled products like hot-rolled coil (HTS 7208.27), cold-rolled sheet (HTS 7209.16), zinc-coated steel (HTS 7210.49.00), stainless steel (HTS 7219), pipe and tube products (HTS 7304-7306), and structural steel (HTS 7216).
Section 232 aluminum tariffs cover HTS chapter 76 products, including unwrought aluminum (HTS 7601), aluminum plates and sheets (HTS 7606), aluminum foil (HTS 7607), and aluminum bars and profiles (HTS 7604). Certain downstream derivative products such as steel nails, aluminum cans, and bumpers are also covered under later proclamations.
The coverage extends to derivative articles as well. Products made predominantly of steel or aluminum, even if classified outside chapters 72-73 and 76, may be subject to Section 232 duties if they are listed in the derivative product proclamation.
Which countries are affected and are there any exemptions?
Section 232 tariffs apply to steel and aluminum imports from nearly all countries. Initially, several countries received temporary exemptions or negotiated quota arrangements. Australia maintained a full exemption for steel. Argentina, Brazil, and South Korea agreed to quota limits in exchange for tariff exclusions.
Canada and Mexico were initially exempted under USMCA but saw Section 232 tariffs reinstated for non-USMCA-qualifying steel and aluminum. To qualify for exemption, the metal must meet USMCA rules of origin, meaning it must be melted, poured, and substantially transformed in a USMCA country.
The EU, Japan, and the UK were subject to temporary tariff-rate quotas that have since been replaced with full 25% tariffs. Importers should verify the current status of any country-specific arrangements, as these have changed multiple times since 2018.