New Steel and Aluminum Tariff Rules Further Increase Costs—Whether the White House Admits It or Not

Clark Packard

In an effort to “simplify” compliance, President Trump signed a new presidential proclamation restructuring how its Section 232 “national security” tariffs on steel, aluminum, and copper — and the finished goods made from them — are calculated. The rules took effect today, April 6. For businesses that import anything containing metal, the changes are significant, and not necessarily in the direction the White House is advertising.

What Changed

Under the new rules, goods made almost entirely of aluminum, steel, or copper—think steel coils and aluminum sheets—will be subject to a 50% tariff on the full value of the item. Derivative products “substantially made” of those metals will now incur a 25% levy. 

The fully tiered structure looks like this: 

• 50% on commodity-grade steel, aluminum, and copper (e.g., raw materials, coils, sheets)
• 25% on derivative products substantially made of those metals (e.g., appliances, trucks, silverware, trains)
• 15% on certain metal-intensive industrial and electrical grid equipment 
• 10% on products made abroad but made entirely with American-sourced metal
• Exempt from Section 232 tariffs: products where the metal content is 15% or less by weight 

The administration also terminated the formal process for adding new derivative products to the tariff list. Going forward, cabinet officials will determine on a rolling basis whether additional derivative goods should be included. 

Here’s the critical nuance that the White House framing glosses over: the rate on many derivative products dropped, from 50% to 25%. But the base on which the tariff rate is applied changed significantly and in a way that probably raises the actual dollar costs for most importers of such products. 

Previously, the 50% tariff on derivative goods only applied to the value of the metal content within a product. Now, the 25% tariff applies to the entire value of a finished product containing steel, aluminum, or copper—not just the value of the metal used to make it. In other words, the tariff now encompasses the cost of labor, fabrication, machining, and every other cost baked into a product’s price. 

A simple example illustrates the impact. Consider a product worth $1,000 that contains $200 worth of steel. Under the old system, a 50% tariff applied only to the steel content, resulting in a $100 duty. Under the new system, a 25% tariff applies to the full $1,000 value, resulting in a $250 duty. Despite the lower rate, the total tariff paid is significantly higher.

So while the structure may be simpler on paper, it is likely to increase costs for many importers in practice. Software can help manage complexity, but it cannot offset a broader tax base.

So yes, the process has been simplified, but only through making many goods subject to heavier tariffs. It seems unlikely that many US importers will consider this a win. Software can help with complexity, but no amount of computing power will get around this de facto tariff increase.

The proclamation signed last week, meanwhile, is only part of the story. As I noted in February, along with my Cato colleagues Scott Lincicome and Alfredo Carrillo Obregon, Customs and Border Protection (CBP) had been quietly tightening the screws on importers for months, using unpublished, unknowable guidance that importers learn about only when they receive an unexpected bill. 

Illinois-based fastener importer Express Fasteners recently filed suit against the government after discovering it had been charged far more in duties than it believed it owed. The company followed CBP’s published guidance. It dutifully reported its products’ steel content and paid the corresponding 50% duty on that content, as well as the applicable reciprocal tariff on everything else. CBP, however, had other ideas and instead applied the 50% steel tariff to the full value of the imported products. 

What was the legal basis for this underhanded approach? An internal CBP memorandum from December 2025 that was never published, never subject to public comment, and that Express Fasteners only learned about from another importer. The government itself didn’t say a word. The memo effectively redefined “non-steel content” to exclude fabrication, machining, labor, and other costs, thus dramatically inflating the product’s taxable base. 

Since June 2025, the US has imposed 50% tariffs on steel, aluminum, and derivative products from virtually every trading partner. In July 2025, copper was added to the Section 232 “national security” tariff regime at the same rate. In August 2025, the US Department of Commerce added 407 product categories to the steel and aluminum tariffs—including wind turbines, mobile cranes, bulldozers, etc.—to the list of derivative products subject to the tariffs. Unsurprisingly, the change has created a sprawling, overlapping web of rules that even experienced trade lawyers struggle to navigate. 

The shift to taxing the value of a derivative product—rather than just its metal content—represents a fundamental change in how these tariffs function. Though the administration claims it is a simplification effort, the new rules are a tariff hike masquerading as one. 

The practical effect of this new approach is a tariff regime where the scope and cost of compliance can change at any time, with little warning and no obvious ceiling. For industries from construction to consumer goods to industrial equipment, the new approach means more taxes, not simplification. 

Source: https://www.cato.org/blog/new-steel-aluminum-tariff-rules-further-increase-costs-whether-white-house-admits-it-or-not