As reported previously, The Trump administration has reworked portions of its Section 232 steel and aluminum derivative tariffs by fine-tuning who pays 25 percent, who gets relief, and under what conditions, all which are effective June 8.
In short, four more products are now squarely in the 25 percent bucket. The bigger story is that a number of products have been shifted out of the 25 percent tariff to a 15 percent additional tariff cap inclusive of MFN rates. These products include agricultural equipment and certain HVAC components.
In addition, certain mobile industrial equipment gets its own new category (annex I-C), which starts at 25 percent but opens the door to lower rates depending on sourcing and origin. Specifically, if equipment comes from certain partner countries, the additional tariff can be capped at 15 percent inclusive of MFN. If it is made with enough U.S.-origin metal, the rate can drop further, to 10 percent. And for qualifying Canadian and Mexican goods under the USMCA, U.S. content up to 40 percent of the value of the derivative is duty-free, but a 25 percent tariff will apply to any U.S. content above 40 percent and any non-U.S. content.
There is also targeted relief for machinery. Certain products in HTS chapters 84, 85, or 87 that will be used exclusively in the manufacture of agricultural, fixed industrial, or mobile industrial equipment can now qualify for a 15 percent cap inclusive of the MFN rate instead of the full 25 percent rate.
And finally, one of the most practical changes: The U.S.-metal threshold has been relaxed. The prior rule required 95 percent U.S. metal content to access a reduced tariff rate of 10 percent, but the revised threshold is 85 percent. That is significant and gives importers more room to qualify for lower tariff rates while still preserving the administration’s incentive to use domestically produced metal.
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