Trump Administration Increases Steel and Aluminum Section 232 Tariffs to 50% and Narrows Reciprocal Tariff Exception

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On June 3, 2025, President Trump issued a proclamation that doubles the United States' Section 232 tariffs on imports of steel, aluminum, and derivative products from 25% to 50% and narrows the exception from the International Emergency Economic Powers Act (IEEPA) reciprocal tariff.1 The proclamation also modifies the stacking order of the tariffs so that all imports of covered products from Canada and Mexico will face the 50% Section 232 tariffs. Imports from the United Kingdom are exempt from the tariff increase (with a potential for modification on or after July 9, 2025). The change entered into effect a few hours after the announcement, at 12:01 am Eastern Daylight Time (EDT) on June 4, 2025.

Steel and aluminum Section 232 tariffs increase to 50% ad valorem

The proclamation adjusts the Section 232 orders on steel products and steel derivative products and aluminum products and aluminum derivative products to increase the tariff rates from 25% to 50%.2 The increase applies to covered goods entered for consumption, or withdrawn from warehouse for consumption, on and after 12:01 am EDT on June 4, 2025. The new tariff rates will remain in effect indefinitely, barring any new modification proclamations issued by the president.

United Kingdom exempted from the tariff increase

The only exception to the tariff increase is for products originating in the United Kingdom. UK origin products will remain subject to the 25% tariff rate indefinitely, with an option for the Secretary of Commerce to change the arrangement on or after July 9, 2025.

According to the proclamation, the Trump administration is granting the UK different treatment to make space for completing negotiations of the US-UK Economic Prosperity Deal (EPD). The United States and UK are negotiating a quota arrangement to replace the Section 232 tariffs, which the two countries previewed in a May 8, 2025 general terms document.3 According to the general terms, the UK "will work to promptly meet U.S. requirements on the security of the supply chains of steel and aluminum products intended for export to the United States and on the nature of ownership of relevant production facilities" to obtain the quota. The June 3 proclamation states the Secretary of Commerce may, anytime on or after July 9, 2025, either (i) "adjust the applicable rates of duty and construct import quotas for steel and aluminum consistent with the terms of the EPD" or (ii) "increase the applicable rates of duty to 50 percent if he determines that the United Kingdom has not complied with relevant aspects of the EPD."

Steel and aluminum derivative products in HTSUS Chapters 76 and 73 will now pay the Section 232 tariffs only on steel and aluminum input value

Steel and aluminum derivative products are subject to the Section 232 tariffs based only on the value of their steel and aluminum content. This differs from the March 12 expansion of the Section 232 tariffs, under which steel and aluminum derivative products classified under Chapter 73 and Chapter 76 of the HTSUS were subject to the Section 232 tariffs on their entire value, regardless of whether they were entirely made of aluminum or steel. The June 3 proclamation modified the system, making products classified under Chapter 73 and 76 also subject to the Section 232 tariffs based solely on the steel and aluminum content.

According to US Customs and Border Protection's (CBP) reporting instructions, when an importer is entering a covered derivative product where the value of the steel and/or aluminum inputs is less than the total entered value of the imported product, the importer should report the aluminum, steel, and non-aluminum/steel content values on separate lines.

Steel and aluminum derivative products will now also pay the IEEPA reciprocal tariff on the value of any non-steel or non-aluminum content

Generally, products subject to Section 232 tariffs are exempt from paying the IEEPA reciprocal tariffs (including the 10% baseline rate that is in effect until July 9). The new proclamation narrows the IEEPA reciprocal tariff exemption for steel and aluminum derivative products, applying the IEEPA reciprocal tariff to the value of non-steel and non-aluminum inputs. Effective June 4, the non-aluminum/steel content value reported by the importer will be subject to the applicable IEEPA reciprocal tariff (which, as of June 4, is the 10% baseline rate for all HTSUS Column 1 countries of origin except Canada and Mexico) and all other applicable tariffs. The importer will continue to pay the Section 232 tariff only on the reported value of the steel and aluminum inputs in the product.

Before June 4, products classified in the Section 232 HTSUS codes that included any steel or aluminum inputs were exempt from IEEPA tariffs on both the steel/aluminum value content and the non-steel/aluminum value content. Only products classified under the Section 232 HTSUS codes that contained no steel or aluminum inputs at all had been subject to the IEEPA reciprocal tariffs.

The steel and aluminum Section 232 tariffs will now take precedence over the IEEPA fentanyl trade-related tariffs on imports from Canada or Mexico

The proclamation reverses certain tariff stacking orders, stipulating that if an import is "subject to"4 the Section 232 tariffs on steel or aluminum, then the IEEPA fentanyl trade-related tariffs on imports from Canada or Mexico do not apply.

The new arrangement is the reverse of the original stacking order issued by President Trump on April 29, 2025. In the original system, if an import was subject to the IEEPA fentanyl trade-related tariffs on imports from Canada and Mexico, then the Section 232 tariffs on steel and aluminum did not apply.5

The Section 232 automotive tariffs continue to take precedence over both the IEEPA fentanyl trade-related tariffs on imports from Canada or Mexico and the Section 232 steel and aluminum tariffs. If a product is subject to Section 232 automotive tariffs, it is not subject to tariffs under the fentanyl trade-related tariffs on imports from Canada or Mexico or the Section 232 steel and aluminum tariffs.

Modifications to Foreign Trade Zone treatment

The new proclamations modify the entry rules for US Foreign Trade Zones (FTZs), requiring that aluminum and steel products covered by the modified Section 232 tariffs enter US FTZs on or after June 4, 2025 in "privileged foreign status." Products entered in privileged foreign status are usually subject, upon entry for consumption from the FTZ, to the tariffs in effect at the time of admission into the FTZ. However, the June 3 proclamation also instructs that steel imports entered into FTZs in privileged foreign status before June 4 and entered for consumption on or after June 4 pay the 50% tariff instead of the 25% tariff that was in effect before June 4.

Basis for the tariff modifications and other recent expansions

President Trump originally announced the tariff increase at a rally in Pittsburgh on May 30,6 though he provided little detail at the time. The June 3 proclamation stated the tariff increase was necessary to "more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the United States market and thereby undercut the competitiveness of the United States steel and aluminum industries." According to President Trump, the previous 25% rate was insufficient for enabling the US industry "to develop and maintain the rates of capacity production utilization that are necessary for the industries' sustained health and for projected national defense needs."

The June 3 proclamation is the second major expansion of the Section 232 steel and aluminum tariffs in 2025. Since 2018, the United States has maintained a 25% tariff on imports of steel (later expanding to certain steel derivative products) and a 10% tariff on imports of aluminum (later expanding to certain aluminum derivative products), subject to varying country and product-based exclusions and alternative arrangements.7 On February 10, 2025, President Trump issued two proclamations — Adjusting Imports of Aluminum into the United States and Adjusting Imports of Steel into the United States — modifying and expanding the 2018 tariff orders.8 The February modifications expanded the tariffs by (i) ending all country exemptions, terminating the product exclusion process, and terminating all existing General Approved Exclusions (GAEs) (granted specific product exclusions will remain in place until their expiration date or until excluded product volume is imported); (ii) raising the aluminum tariffs from 10% to 25%; (iii) adding more derivative products to the tariffs' coverage and creating a new process to add other products in the future; and (iv) creating a new exemption process for steel products "melted and poured" and aluminum products "smelted and cast" in the United States. The February tariff modifications entered effect on March 12, 2025.

The Department of Commerce is currently considering expanding the coverage of the steel and aluminum derivatives products lists to include hundreds of billions of dollars of additional trade.9 As instructed in the February 10 presidential proclamation, Commerce established a new derivative products "Inclusions Process" in May 2025. In the first round of applications, Commerce received requests to include 501 new HTSUS eight- and ten-digit codes, covering approximately $284 billion of US imports in 2024. The codes relate to vehicle parts, industrial machinery, electronics, minerals, chemicals, toys and sporting equipment, railway parts, aircraft parts, food, cosmetics, pharmaceuticals, furniture, film equipment, and semi-processed forms of aluminum. Commerce is scheduled to issue its determinations on the applications by mid-July.

1 Proclamation 10947 of June 3, 2025: "Adjusting Imports of Aluminum and Steel into the United States," 90 FR 24199. See also, CBP guidance for steel at "CSMS # 65236374 - UPDATED GUIDANCE: Import Duties on Imports of Steel and Steel Derivative Products" (later corrected in "CSMS # 65289012 - UPDATED GUIDANCE: Import Duties on Imports of Steel and Steel Derivative Products"); guidance for aluminum at "CSMS # 65236645 - UPDATED GUIDANCE: Import Duties on Imports of Aluminum and Aluminum Derivative Products" (later corrected in "CSMS # 65288784 - UPDATED GUIDANCE: Import Duties on Imports of Aluminum and Aluminum Derivative Products"); and for the stacking changes at "CSMS # 65236574 - UPDATED GUIDANCE – Proclamation 'Adjusting Imports of Aluminum and Steel in the United States,' Amending Executive Order 14289, 'Addressing Certain Tariffs on Imported Articles.'" 
2 A separate 200% Section 232 tariff rate continues to apply to aluminum and aluminum derivative products that are products of Russia, or where any amount of primary aluminum used in the manufacture of the aluminum articles is smelted in Russia, or where the aluminum articles are cast in Russia.
3 "General Terms for the United States of America and the United Kingdom of Great Britain and Northern Ireland Economic Prosperity Deal," May 8, 2025. 
4 "Subject to," in the context of the Trump administration's tariff stacking orders, means "that duty more than 0% is owed under the tariff action."
5 Executive Order 14289 of April 29, 2025: "Addressing Certain Tariffs on Imported Articles," 90 FR 18907.
6 Truth Social post of May 30, 2025. 
7 Proclamation 9704 of March 8, 2018: "Adjusting Imports of Aluminum Into the United States," 83 FR 11619; and Proclamation 9705 of March 8, 2018: "Adjusting Imports of Steel Into the United States," 83 FR 11625.
8 Presidential Proclamation of February 10, 2025: "Adjusting Imports of Steel into The United States," 90 FR 9817; and Presidential Proclamation of February 10, 2025: "Adjusting Imports of Aluminum into The United States," 90 FR 9807.
9 See White & Case's Client Alert on the new inclusions process at "Commerce Department Opens New Steel and Aluminum Section 232 Tariff Inclusions Process."

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This article is prepared for the general information of interested persons. It is not, and does not attempt to be, comprehensive in nature. Due to the general nature of its content, it should not be regarded as legal advice.

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