Section 232 at 50%: What Procurement Teams Must Know in 2026

Section 232 tariffs on steel and aluminum have undergone more structural change in the last 12 months than in the previous six years combined. Rates doubled from 25% to 50% in June 2025. The product exclusion process was shut down in February 2025, replaced briefly by an "inclusions" mechanism that was itself terminated in April 2026. Duties now apply to the full customs value of covered articles, not just the metal content. For procurement teams that buy anything containing steel, aluminum, or copper, the tariff regime is no longer a manageable surcharge — it is a structural cost factor that changes sourcing decisions.

The three changes that rewrote the tariff landscape

Understanding where Section 232 stands in mid-2026 requires tracking three distinct policy changes that compound on each other.

Each change is significant alone. Together they mean that the old procurement playbook — apply for an exclusion, manage the metal-content calculation, absorb the tariff as a known cost — no longer works. Every purchasing decision involving steel, aluminum, or copper must be re-evaluated against the current regime.

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Why the death of the exclusion process matters most

Between 2018 and 2025, the Section 232 exclusion process was the primary safety valve for procurement teams. Companies could apply for product-specific exclusions, and Commerce granted roughly 60% of requests on average. The process was slow and unpredictable, but it provided a pathway for products that could not be sourced domestically at sufficient quality or volume.

That pathway closed on February 10, 2025. The short-lived "inclusions process" that followed was the opposite of an exclusion mechanism — it let industry groups petition to add more products to tariff coverage rather than remove them. In August 2025, Commerce added more than 400 product codes under the first inclusion round. The April 2026 proclamation terminated the inclusion process entirely, though the administration retains authority to expand coverage via presidential proclamation at any time.

The practical effect is stark: there is currently no formal pathway to reduce or waive Section 232 duties on any product. Procurement teams must assume the tariff applies and plan accordingly. The only remaining levers are classification, origin strategy, supply base restructuring, and contract design.

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How the duty calculation change affects landed cost

Before April 2026, Section 232 duties on mixed metal products were calculated on the value of the steel or aluminum content only — not the full value of the imported article. This meant that a piece of machinery containing $100 worth of steel components and $900 worth of non-metal parts paid duty only on the $100 of metal content.

The April 2026 proclamation changed this structure fundamentally. Duties now apply to the full customs value of covered articles, with a tiered rate based on HTS classification and metal intensity. For products where steel or aluminum is a significant but not dominant component, this change can multiply the tariff cost by 5x to 10x. A $1,000 industrial component with 15% steel content that previously paid duty on $150 now pays duty on the full $1,000 at 50% — a tariff cost of $500 instead of $75.

"Importers of machinery, electrical equipment, and fabricated components now face the most complex Section 232 compliance environment since the program began."
— Perkins Coie trade advisory, April 2026

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Six structural responses for procurement teams

With no waiver pathway available, procurement organizations must focus on six structural levers. These are not quick fixes — they require process changes, supplier negotiations, and in some cases product redesign. But they are the only available tools for managing Section 232 costs in the current environment.

• HTS classification audit. Every SKU containing steel, aluminum, or copper needs a precise HTS code review. Misclassification is the most common source of overpayment. Work with customs brokers and trade counsel to map every item against the current Section 232 annexes and tiered rate structure.
• Domestic and exempt-country sourcing. Australia retains a permanent exemption from steel and aluminum Section 232 duties. Canada and Mexico operate under modified rates. For categories where domestic suppliers can match quality and lead time, the 50% tariff advantage makes US-sourced steel and aluminum competitive on total cost for the first time since the program began.
• Tariff pass-through contract clauses. Every supplier contract for steel, aluminum, or copper-intensive products should include a tariff adjustment mechanism. The clause should specify: which tariffs are covered (Section 232 and 301), how the cost is calculated (actual duty paid, not estimated), and how it flows through to the buyer. Without this clause, the importer absorbs the full 50% surcharge as margin compression.
• Design changes and material substitution. Because the April 2026 system uses tiered rates based on HTS and metal intensity, reducing steel or aluminum content can move a product into a lower-rate classification. Engineering and procurement should evaluate substitutions for non-critical metal components — plastic, composites, or alternative alloys.
• Inventory buffering around policy dates. Section 232 rates and scope have changed multiple times since 2025. Procurement teams should build safety stocks of critical steel and aluminum items before anticipated policy changes, and avoid holding excess inventory after rate reductions that may not materialize.
• Centralized trade compliance governance. With rules changing at unpredictable intervals, the old model of decentralized duty management is dangerous. Leading organizations are consolidating customs, legal, tax, and procurement into a single governance structure that tracks proclamations, HTS annex updates, and landed cost simulations across sourcing scenarios.

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What this means for procurement leaders

The single biggest mistake procurement teams can make in the current Section 232 environment is treating it as a temporary disruption. The 50% rate has been in effect for a full year. The full-value calculation has been in place for two months. There is no pending legislation, no court challenge, and no administrative process that would reduce or eliminate these duties in the near term. Section 232 at 50% is the baseline, not a peak.

• Audit every steel and aluminum SKU for correct HTS classification. If you have not reviewed your HTS codes since the April 2026 restructuring, you are almost certainly overpaying or underpaying — both carry financial risk.
• Model the landed cost impact of full-value duties. For every imported product where steel or aluminum content is below 50% of total value, calculate the difference between metal-content-only and full-value duty. The gap will determine which products need immediate sourcing changes.
• Add tariff pass-through clauses to new contracts. Every sourcing contract signed from today forward should include a Section 232/301 adjustment clause. Existing contracts without such clauses should be renegotiated at the next renewal.
• Evaluate domestic sourcing for high-volume steel and aluminum categories. The 50% tariff creates a structural cost advantage for US-sourced metal that did not exist at 25%. Re-run your total cost of ownership models with the current duty rates.
• Build a trade compliance function if you do not have one. The Section 232 regime changes too frequently for procurement to manage as a side responsibility. Designate someone to track proclamations, HTS updates, and landed cost models as a primary role.

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Frequently asked questions

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