President Donald Trump issued a Proclamation on June 3, 2025 increasing the previously imposed Section 232 tariffs on aluminum and steel products and their derivatives from 25% to 50%. These increased tariffs were effective June 4, 2025. The proclamation excluded products of the United Kingdom which stay at 25% until July 9, 2025.
U.S. Customs and Border Protection (CBP) issued guidance via its Cargo Systems Messaging Service (CSMS) in CSMS # 65236374 , CSMS # 65236645 and CSMS # 65236574. The Proclamation and CBP guidance make several important changes to the calculation of the tariffs and stacking of the various Section 232 and International Economic Emergency Powers Act (IEEPA) tariffs, including the use of the United States-Mexico-Canada Agreement preferences.
Tariffs on Aluminum, Steel & Derivatives
Tariffs imposed under Section 232 on aluminum, steel and their derivatives are modified to increase the respective tariff rates from an additional 25% ad valorem to an additional 50% ad valorem for products of countries other than those from the United Kingdom. An exception for Russia continues – aluminum from Russia, or products containing Russian aluminum, remain subject to a 200% tariff on the entire value.
Aluminum and Steel Content in Articles
A key change is that the 50% tariff now applies only to the value of the aluminum/steel content in all imported articles in Chapter 73 and 76 and not the entire value of the product. Previously, the value of aluminum/steel items was only separated for derivative articles outside of Chapter 73 and 76. The non-aluminum/steel portion of these articles will be subject to other applicable tariffs, such as the IEEPA reciprocal tariffs (e.g., 10%).
If the value of the steel/aluminum content is (1) the same as the entered value or (2) is unknown, the duty must be reported under the Chapter 99 classification based on the entire entered value and reported on only one entry summary line.
Where the value of the steel/aluminum content is less than the entered value of the imported article, the good must be reported on two lines. The first line will represent the non-steel content while the second line will represent the steel content. Each line should be reported in accordance with the instructions in CSMS # 65236645 and CSMS # 65236574.
Importers must report the country of melt and pour for steel, and the country of smelt and cast for aluminum, using ISO codes. Supporting documentation must be maintained. Importers must use the correct Chapter 99 HTS codes for each tariff action. CBP will strictly enforce compliance with fines and loss of import rights for violators.
Foreign-Trade Zones and Drawback
Any aluminum or steel article, or their derivatives, admitted into a U.S. foreign-trade zone (FTZ) on or after June 4, 2025, must be admitted under “privileged foreign status” and will be subject to the new tariff rates upon entry for consumption.
Any derivative steel articles previously admitted to a U.S. FTZ under “privileged foreign status,” will nevertheless be subject to the tariff rate in effect on the date of entry for consumption. For example, items of steel entered into an FTZ under privileged foreign status on June 1 when a 25% rate was in effect but later entered into the U.S. for consumption while the 50% rate is in effect, would pay the 50% rate.
No drawback is available for the duties imposed.
New Order for Stacking Tariffs
The updated guidance changes the order for calculating the stacking of tariffs. (See Thompson Hine Update of April 30, 2025 for prior guidance on stacking). The new priority order moves the Section 232 aluminum and steel tariffs above the IEEPA tariffs on Canada and Mexico relating to the border and fentanyl. The new order for stacking tariffs is:
- Section 232 Auto/Auto Parts – Proclamation 10908 of March 26, 2025 (Adjusting Imports of Automobiles and Automobile Parts into the United States), as amended;
- Section 232 Aluminum – Proclamation 9704 of March 8, 2018 (Adjusting Imports of Aluminum into the United States), as amended;
- Section 232 Steel – Proclamation 9705 of March 8, 2018 (Adjusting Imports of Steel into the United States), as amended;
- IEEPA Canada – Executive Order 14193 of February 1, 2025 (Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border), as amended;
- IEEPA Mexico – Executive Order 14194 of February 1, 2025 (Imposing Duties to Address the Situation at Our Southern Border), as amended.
How to Stack Tariffs in Practice
- Determine if the product is subject to the Section 232 auto/auto parts tariff. If so, stop—no further Section 232 or IEEPA tariffs apply.
- Check for Section 232 aluminum and/or steel tariffs. If applicable, apply the 50% (or 25% for UK) rate to the value of the aluminum and/or steel content. The non-aluminum/steel portion is subject to IEEPA reciprocal tariffs and other tariffs.
- If the product is not subject to any of the previously-mentioned tariffs, apply the IEEPA fentanyl (Canada/Mexico) tariffs as appropriate.
- Apply other applicable duties (e.g., IEEPA fentanyl tariffs on China, antidumping, countervailing, Section 301, Most-Favored Nation (MFN) tariffs) in addition to the previously mentioned tariffs, as these are not affected by the stacking order.
The modified tariff stacking order applies to goods entered for consumption, or withdrawn from warehouse for consumption, on or after June 4, 2025.
USMCA Exemption
The updated guidance advises that “subject to” means that duty more than 0% is owed under the tariff action. The updated guidance expressly provides:
- “Parts of passenger vehicles and light trucks that qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA), ARE NOT subject to the 232 Auto/Auto Parts, the IEEPA Canada, or the IEEPA Mexico tariffs.” and
- “Articles that qualify for preferential tariff treatment under USMCA, ARE NOT subject to the IEEPA Canada or IEEPA Mexico tariffs.”
Previously, aluminum, steel and their derivative products that were subject to the IEEPA tariffs on Canada and Mexico but met USMCA certification requirements typically paid 0% duties (as the IEEPA tariffs on Canada and Mexico were before aluminum/steel in the priority order). The updated guidance now requires the importer of record (IOR) to enter the Section 232 aluminum, steel and derivative products first (after analyzing whether Section 232 auto and auto parts tariffs apply). Of potential greater impact, since the “USMCA exemption” for auto parts and IEEPA Canada/Mexico tariffs means qualifying articles do not pay any duty under those tariffs, USMCA-qualifying items will no longer be considered “subject to” those tariffs. An item that is USMCA-qualified and exempt from the Section 232 auto tariffs may pay Section 232 aluminum/steel tariffs.
All companies should review current practices regarding stacking and use of the USMCA exemption to determine the applicable tariffs. The updated guidance imposes these requirements as of June 4, 2025, and indicates that the revised stacking procedures are not retroactive.