Squire Patton Boggs representatives have recently led several discussions with US Customs and Border Protection (CBP) over the current evolution of Section 232 regulations on aluminum and steel. Based on these conversations and our own evaluation of the landscape, we provide the following summation of the 232 regulatory revisions released on June 3, 2025 and address some concerning rumors and misinterpretations circulating in the trade community.

Effective June 4, 2025, the US government revised Section 232 regulations on aluminum and steel, increasing the tariff rate from 25% to 50% with a temporary exception for the United Kingdom. [1] Chapter 72 goods are deemed to be 100% iron or steel products, with the Section 232 duty assessed on the full entered value. CBP also confirmed that country-specific exemptions and the exclusion request process will likely remain canceled, with no new exclusions available and no existing exclusions renewed.

A significant change, CBP will no longer automatically assess Section 232 tariffs on the full entered value for Chapter 73 (steel and iron articles/derivatives) and Chapter 76 (aluminum articles/derivatives) goods. Previously, importers could only itemize and pay the 232 duty on the value of the aluminum or steel content of derivative products classified outside of Chapter 73 and Chapter 76. By harmonizing the treatment of derivative products listed under the 232 aluminum and steel actions, the June 3 Proclamation now permits importers to pay the 232 duty on only the steel and aluminum content, regardless of the chapter under which the product is classified.

When reporting the value of the steel or aluminum content in a derivative article containing non-aluminum or non-steel content, importers must report the merchandise on two lines of the Entry Summary (CBP Form 7501); the first line will represent the non-steel/non-aluminum content, while the second line will represent the steel/aluminum content. CBP specifically noted that effective June 4, 2025, the non-steel/non-aluminum content of the entered merchandise is subject to applicable reciprocal tariff rates based on country of origin. One additional, unique note: if a foreign manufacturer produced an intermediary steel/aluminum input article used to make the final product imported into the United States, then the steel/aluminum content must be valued at the price of that intermediary input. 

CBP is aware that the June 3 revision to the Section 232 aluminum and steel actions created confusion within the affected industries. Of particular concern is the suggestion that non-steel/non-aluminum additives used in the production of derivative products (e.g., alloying additives or powder coating) or costs of converting aluminum/steel raw material into derivative products (e.g., labor costs, utilities, fixed costs, overhead, and profit) can be itemized to avoid assessment of the 232 duty on the non-steel/non-aluminum additives and conversion costs. Based on specific discussions with CBP, we contend this approach is incorrect, and increases the risk of enforcement actions that could include allegations of willful negligence or worse.

At Squire’s request, CBP addressed specific industry rumors:

1. Rumor: If importers can’t identify the precise content or value of aluminum or steel in their products, then the entire product value is subject to the 50% 232 duty.

This rumor is accurate and firmly supported within the regulatory language.

2. Rumor: Packaging and labeling costs may be excluded from the 232 tariffs on 100% aluminum or steel products.

This rumor is inaccurate. CBP takes the position that a product made from 100% aluminum or steel owes the 232 duty on the full entered value, including non-aluminum packaging or labeling components.

3. Rumor: For a derivative aluminum article classified in Chapter 76 or a derivative article classified in Chapter 73 that is 100% aluminum or steel, the importer can report the raw material aluminum or steel cost for 232 assessment and report the conversion costs (labor, utilities, overhead) and profit on a separate line as “non-aluminum” or “non-steel” content to which the reciprocal tariff applies.

This rumor is also inaccurate. For a derivative article containing only aluminum or steel (e.g., a flange produced from a billet), the entered value of the aluminum or steel content should include all conversion costs for merchandise. Non-aluminum or non-steel content subject only to the reciprocal tariff refers to other commodity material; for example, a wooden handle added to an aluminum shovel head.  

4. Rumor: Reporting requirements for steel/aluminum content have become stricter to prevent false declarations.

CBP stated that the reporting requirements have not changed, but acknowledged there has been an increase in 232 investigations geared toward increasing industry compliance.

Regarding the recent uptick in 232 exclusion investigations, CBP recommends that companies who receive a letter of investigation under 19 U.S.C. § 1592 should immediately tender duties owed unless they hold credible evidence to refute the alleged exclusion overages. If the recipient of the investigative notice does not immediately tender duties or challenge the allegation, CBP may aggressively pursue the Section 1592 investigation and seek additional penalties for culpability arising from negligence.

Finally, a note of caution for importers holding active 232 exclusions: stay within your allotment. Some companies believe the Automated Customs Entry (ACE) system will protect them by automatically shutting off when they reach the quota. This is not (quite) accurate – ACE will deactivate the exclusion once the company reaches 95% of the quota, but it takes approximately two days to process the deactivation. Meanwhile, multiple entries can happen during the processing time, and CBP intends to hold importers responsible for the overage (i.e., use of the exclusion beyond the allotted amount).

CBP is actively discussing how to address industry confusion and concern, stating that importers should apply a common-sense interpretation to the modified regulations. We anticipate that CBP will issue a Cargo Systems Messaging Service (CSMS) or a Trade Remedy FAQ to clarify these issues in the coming months. Meanwhile, Squire will continue analyzing the 232 revisions to improve our clients’ ability to achieve compliance, avoid penalties, and navigate the regulatory landscape.

[1] Steel and aluminum products from the United Kingdom remain subject to the previous 25% tariff rate until July 9, 2025. After this date, the US Secretary of Commerce may impose quotas or raise the tariff to 50%.