Section 232 In The Spotlight: The Current State Of National Security Tariffs

With the fate of many of President Trump's signature tariffs targeting foreign countries under the International Emergency Economic Powers Act of 1977 (IEEPA) in some doubt, his administration has relied more heavily on sectoral tariffs targeting specific products under Section 232 of the Trade Expansion Act of 1962, which are legally more durable but require a national security justification to impose. There are currently 15 product categories—including metals, vehicles, and wood—actively covered by tariffs or under investigation pursuant to Section 232. In this article, we survey the nature and state of the Section 232 tariffs, and advise companies producing or purchasing these products how to navigate them.

The President's Tariff Authority

While the Constitution grants the tariff power to the Legislative Branch, Congress has enacted a number of laws delegating that power to the President to execute in various circumstances. As we have advised, President Trump has invoked IEEPA, 50 U.S.C. § 1702, which authorizes the President to "regulate ... importation" to deal with a foreign threat, id. § 1702(a)(1)(B), to justify imposing the "trafficking" tariffs on Canada, Mexico, and China, "reciprocal" tariffs on nearly all countries, and additional tariffs on Brazil and India. Another of those laws is Section 232, 19 U.S.C. § 1862, which allows the President to "adjust ... imports" of an "article and its derivatives," including by imposing tariffs, quotas, tariff-rate quotas (TRQs), license fees, embargoes, or the like, where the Secretary of Commerce finds that imports of a particular article "threaten to impair the national security," id. § 1862(c)(1)(A).

Under his asserted IEEPA authority, President Trump has imposed tariffs on foreign countries largely without consultation or notice and for various reasons, as the statute imposes few express boundaries. Section 232 though, unlike IEEPA, contains important procedural safeguards in addition to the substantive national security basis, which tends to create more certainty for the trade community to project tariff costs. The Secretary of Commerce must complete an investigation into the effects of a given article on national security within 270 days upon request from an interested party or on her own motion. In practice, the Department of Commerce's Bureau of Industry and Security (BIS) conducts this investigation, which includes the opportunity for public input on issues like domestic supply meeting domestic demand, the risks of imports from a from a small number of suppliers or foreign nations, predatory or unfair trade practices, and the potential for weaponization or exploitation of imports. Commerce must issue a public report, and within 90 days the President must decide whether and what action to take to alleviate any national security threat.

Other statutes authorize the Executive Branch to impose tariffs, in addition to the antidumping and countervailing duty laws, including Sections 122, 201, and 301 of the Trade Act of 1974, 19 U.S.C. §§ 2132, 2251, and 2411. Section 122 allows the President to impose a tariff of up to 15 percent on imports for up to 150 days to address a trade deficit or currency depreciation. Section 201 allows the President to impose tariffs on a specific article where the U.S. International Trade Commission finds that imports of that article are injuring a domestic industry. Section 301 allows the U.S. Trade Representative to impose tariffs on goods of a specific country where it finds that the United States is being denied any rights under a trade agreement or for unfair foreign trade practices—such as those on most Chinese goods since 2018. Finally, Section 338 of the Tariff Act of 1930, id. § 1338, allows the President to impose tariffs of up to 50 percent on goods of a specific country that "imposes any unequal imposition or discrimination" against U.S. commerce.

Section 232 Actions and Features

President Trump has used Section 232 more broadly than past presidents. From 1962 through 2016, the Government conducted 26 investigations under Section 232, which led to nine national security threat determinations, mostly related to petroleum imports, and took various actions but imposed no tariffs. In his first term, Commerce conducted seven investigations resulting in six threat determinations, including from steel, aluminum, and automobiles and automobile parts; he imposed tariffs on steel and aluminum imports, discussed below, and entered into negotiations on the rest. Commerce initiated only one investigation under President Biden, which found a threat but resulted in non-tariff action.

Now, President Trump's second term has seen a surge in the use of Section 232 and imposition of such tariffs. Steel and aluminum tariffs have been increased, action has been taken on automobiles and automobile parts, and 12 new investigations have been opened, all of which have resulted in tariffs where completed. Moreover, as we have advised, a federal appeals court found some tariffs imposed under IEEPA unlawful—with the U.S. Supreme Court set to hear arguments November 5—and so this Administration's strategy has slowly shifted from reliance on IEEPA to the even greater use of Section 232, which has been upheld by the courts.

For all actions so far, articles, and in some cases the content of articles, subject to Section 232 actions are exempt from the IEEPA tariffs save for the China trafficking tariff, and often from multiple Section 232 tariffs—but not from most-favored-nation (MFN) or Section 301 tariffs, or antidumping or countervailing duties—in a rule known as "stacking" under Executive Order (EO) 14289 that determines whether tariffs are cumulative and which prevail. The tariffs often incorporate exceptions for products originating from countries with which the United States has negotiated trade deals—as of now, the United Kingdom, the European Union, and Japan—and Commerce and the U.S. Trade Representative (USTR) are empowered by EO 14346 to implement future deals. Exceptions for goods qualifying under free trade agreements may exist. Goods may claim treatment under Chapter 98 of the Harmonized Tariff Schedule of the United States (HTS), except that duties under Subheading 9802.00.60 shall be based upon their full value.

Undercutting the increased certainty provided by Section 232 as opposed to IEEPA, however, are other features of Section 232 actions. As noted, the President is authorized to adjust imports of not only the principal article under investigation but also derivatives, and recent actions have also imposed tariffs on such downstream products containing the investigated article. President Trump and Commerce this term have made adjustments to the list of covered derivative products long after taking the initial action, including by instituting regular comment periods throughout the year whereby the public can request the inclusion of additional derivative products within the action. This is in contrast to a product exclusion request process in place during his first term and under President Biden. Drawback is usually unavailable, and in all cases, products ineligible for "domestic status" admission to a foreign trade zone (FTZ) must be admitted under "privileged foreign status."

Metal and Content Tariffs: Steel, Aluminum, Copper

At present, three metals—steel, aluminum, and copper—generally face a tariff of 50 percent, whether as articles themselves or based on the value content of certain derivative articles into which they are incorporated. UK steel and aluminum tariffs are 25 percent and exempt certain aerospace goods, certain aerospace goods from the European Union and Japan are exempted for all metals, and Russian aluminum bears a 200 percent rate.

As noted above, tariffs on steel and aluminum date back to the early days of President Trump's first term. In April 2017, at the urging of the President, Commerce opened separate investigations into the national security implications of imported steel and aluminum. After engaging in a rigorous public comment and hearing period, Commerce published reports dated January 2018 on both "steel mill products" and aluminum products, finding that both metals were important for U.S. national security, their imports were adversely affecting domestic industries, and global excess capacity weakened the domestic economy.

Proclamations 9704 and 9705 of March 2018 first imposed tariffs on certain products—identified by their HTS classifications—of aluminum under Chapter 76 at 10 percent ad valorem and of steel across Chapters 72 and 73 at 25 percent, respectively, with exceptions or alternative arrangements for multiple countries in those and later proclamations. They also authorized a process, soon implemented by BIS, whereby affected parties could request one-year exclusions for articles BIS determines are not domestically produced in a sufficient and reasonably available amount or of a satisfactory quality, or based upon specific national security considerations. In January 2020, to address perceived circumvention of the tariffs, Proclamation 9980 created a list of derivative products in Chapters 72, 73, and 76, and Headings 8708.10.30 and 8708.29.21 on which steel or aluminum duties would be assessed. The Biden Administration largely maintained these tariffs and procedures, although it increased the tariff for Russian aluminum, including "where any amount of primary aluminum used in the manufacture of the ... articles is smelted in Russia, or the ... articles are cast in Russia," and for Mexican goods instituted certain steel "melt and pour" and aluminum "smelt and cast" rules.

Upon his return to office in 2025, President Trump quickly overhauled the steel and aluminum tariff regime. Proclamations 10895 (aluminum) and 10896 (steel) of February 10 raised the non-Russian aluminum rate to equal the steel rate at 25 percent and revoked all country exceptions or alternative arrangements, effective March 12. The proclamations directed Commerce to add to the derivatives list, which BIS did on March 5, 167 steel products in HTS Chapters 73, 84, 85, and 94, and 122 aluminum products in HTS Chapters 66, 76, 83, 84, 85, 87, 88, 90, 94, 95, and 96—now covering a broad range of manufactured goods seemingly attenuated from the raw materials—specifying that for listed products outside of Chapters 73 or 76 only the steel or aluminum content would be subject, and derivatives originating from articles that were melted and poured or smelted and cast, respectively, in the United States would be exempted. They also forbade U.S. Customs and Border Protection (CBP) from considering mitigating factors in any penalty case for misclassifying covered products to avoid Section 232 duties—in line with the tough stance on trade enforcement that the Administration would take, which we have detailed.

Further, the February 10 proclamations immediately terminated the product exclusion request process, allowing granted exclusions to remain in effect until expiration, and rescinded all general approved exclusions (GAEs), directing Commerce instead to establish a derivative product inclusion request process. (Commerce was also empowered to add derivatives unilaterally, and BIS added two HTS numbers for aluminum in April and 11 for steel in June.) In May, BIS opened a two-week period in which domestic producers or industry associations could submit inclusion requests and during the initial submission period received requests to add 467 HTS codes. Effective August 18, and with one business day notice, BIS added 407 HTS codes both within and outside of Chapters 72, 73, and 76, rejecting another 60 requests due to overlap with other Section 232 investigations. The September period closed with 95 inclusion requests, on which BIS must issue decisions by late November. Future submission periods will occur every January, May, and September.

Proclamation 10947 of June 3 increased the rate to 50 percent, keeping the 25 percent rate for steel and aluminum originating from the United Kingdom to advance the U.S.–UK trade deal. With further regard to the U.S.–UK deal, EO 14309 of June 16 exempted UK aerospace products that fall under the World Trade Organization Agreement on Trade in Civil Aircraft ("Aircraft Agreement"), effective June 30, and authorized Commerce and USTR to establish a TRQ in the future.

At this point, for copper, an investigation into "copper in all forms" had been directed by EO 14220 of February 25, 2025, and initiated on March 10. Although the Commerce report has not been made public, Proclamation 10962 of July 30 made the copper content of certain "semi-finished copper products and intensive copper derivative products" classified in HTS Chapter 74 or 85 subject to a 50 percent tariff, effective August 1. The proclamation also directed Commerce to establish an inclusion process similar to that for steel and aluminum within 90 days, for which no announcement has yet been made.

To implement the trade deal with Japan, EO 14345 of September 4 exempted from all metal tariffs most Japanese aerospace products that fall under the Aircraft Agreement, effective September 16. On September 25, Commerce's International Trade Administration (ITA) and the USTR exempted many EU aerospace products from all metal tariffs, effective retroactively to September 1, based upon the terms of the U.S.–EU deal.

Vehicles and Parts Tariffs: Automobiles, Trucks, Buses

Tariff action has also been taken against a variety of vehicles and their parts. Currently, certain automobiles (i.e., passenger vehicles and light trucks), medium- and heavy-duty trucks, and their parts are generally subject to a 25 percent Section 232 tariff, while buses are subject to 10 percent. EU or Japanese automobiles and parts bear a duty rate of 15 percent minus the MFN rate but no less than zero, certain U.K. automobiles have a TRQ of 7.5 percent up to 100,000 units annually, and U.K. automobile parts for use in U.K. automobiles face a 10 percent Section 232 plus MFN rate. Trucks and buses manufactured at least 25 years prior to entry are exempt. The tariff may not apply to the U.S. content ("parts wholly obtained, produced entirely, or substantially transformed in the United States" for automobiles and value "attributable to United States-based activity supporting domestic production" for trucks) of vehicles qualifying for preferential treatment under the United States–Mexico–Canada Agreement (USMCA) or to USMCA-qualifying vehicle parts (but not knock-down kits or parts compilations), for now, with Commerce approval. According to the stacking rules, an article subject to a Section 232 vehicle or parts tariff is not subject to Section 232 metal tariffs, in addition to non-China-trafficking IEEPA tariffs. Parts' duties are eligible for manufacturing drawbacks only, effective October 17. Finally, an import adjustment offset of parts duties is available equal to 3.75 percent of the MSRP or aggregate value of all automobiles and trucks undergoing final assembly in the United States by a particular manufacturer from April 5, 2025 through April 30, 2030 (automobiles) or November 1, 2025, through October 31, 2030 (trucks).

The investigation on automobiles and parts also dates back to President Trump's first term, as noted above, initiated by Commerce in May 2018. In Proclamation 9888 of May 17, 2019, President Trump concurred with Commerce's report dated February 17 (yet not published until 2021) that found domestic automotive research and development and manufacturing to be vital to national security and threatened by imports of automobiles and parts, and elected to direct the USTR to negotiate with foreign governments rather than impose tariffs to address the threat. In his second term, however, the President quickly changed his position, and in Proclamation 10908 of March 26, 2025, imposed a 25 percent Section 232 tariff on certain automobiles of HTS Chapter 87 effective April 3 and parts of Chapters 40, 70, 73, 83, 84, 85, 87, 90, and 94 effective May 3. He also directed Commerce to create an inclusion process for automobile parts; the ITA did so in September, scheduling two-week request submissions periods to occur quarterly, with the October period now closed. Proclamation 10925 of April 29 introduced a now-outdated import adjustment offset program, EO 14309 established the UK parts rate and TRQ for automobiles under HTS Heading 8703, EO 14345 set the Japanese rate, and ITA and the USTR implemented the EU rate on September 25, effective retroactively to August 1.

The investigation into "medium-duty trucks, heavy-duty trucks, and medium- and heavy-duty truck parts, and their derivative products" began on April 22, and Proclamation 10984 of October 17 imposed the present tariffs on certain trucks of HTS Chapter 87, truck parts of the same chapters as automobile parts, and buses of Heading 8702, effective November 1, based on an unpublished Commerce report. Note that an article is not a subject truck simply because it is classified within the subject HTS provisions. It also directed Commerce to create an inclusion process for truck parts and introduced the new import adjustment offset for all vehicles and drawback provision for all vehicle parts.

Wood Tariffs and Pending Investigations

In addition to the metal and vehicle tariffs, on September 29, President Trump issued Proclamation 10976, imposing tariffs on softwood timber and lumber, and certain derivative products. As of October 14, certain softwood timber and lumber imports under HTS Chapter 44 face a 10 percent tariff, and certain upholstered wooden furniture under Subheading 9401.61 and certain kitchen cabinets and vanities, including parts, under Heading 9403 face a 25 percent rate. On January 1, 2026, the furniture rate will increase to 30 percent and the cabinets and vanities rate to 50 percent—the first time President Trump has introduced planned rate increases in a Section 232 action. The U.K. rate for all wood products is fixed at 10 percent, and the combined Section 232 and MFN EU and Japanese rates for furniture and cabinets and vanities are fixed at 15 percent. The Section 232 automobiles, automobile parts, and truck parts (but not truck or bus) tariffs supersede the wood tariff, meaning the wood tariffs will not apply if the article is subject to both. BIS on its own or through an ordered future inclusion process may add further derivative products to the scope. Drawback is allowed. The investigation into "timber, lumber, and their derivative products" was spurred by executive order on March 1, 2025, and initiated on March 10; no Commerce report is publicly available.

The following investigations all remain ongoing following the close of public comment. There is no indication that Commerce has yet submitted its report and recommendation to the President in any of these proceedings, but tariffs or alternative import adjustments could be announced at any time, likely along the lines of the actions seen so far this year. Many of these products are already exempted from the IEEPA tariffs, in anticipation of future Section 232 duties. Commerce is currently investigating:

• Semiconductors and Semiconductor Manufacturing Equipment, initiated April 1. Semiconductors include, "among other things, semiconductor substrates and bare wafers, legacy chips, leading-edge chips, microelectronics, and SME components." The investigation also covers derivative products, which "include downstream products that contain semiconductors, such as those that make up the electronics supply chain."
• Pharmaceuticals and Pharmaceutical Ingredients, also initiated April 1. According to the notice, "This includes both finished generic and non-generic drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients and key starting materials, and derivative products of those items." In September, President Trump announced on social media a 100 percent tariff effective October 1 on branded or patented pharmaceutical products "unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America," but delayed implementation pending negotiations with manufacturers and has released no order to impose it.
• Processed Critical Minerals, including derivatives, initiated April 22. "Critical minerals" is meant to reflect at least the United States Geological Survey's (USGS) 50 "Critical Minerals List," plus uranium and rare earth elements. Processing refers to "the activities that occur after critical mineral ore is extracted from a mine up through its conversion into a metal, metal powder, or a master alloy. These activities specifically occur beginning from the point at which ores are converted into oxide concentrates; separated into oxides; and converted into metals, metal powders, and master alloys." Derivative products include "all goods that incorporate processed critical minerals as inputs. These goods include semi-finished goods (e.g., anodes and cathodes) as well as final products (e.g., motors, batteries, radar systems, wind turbines and their components, and advanced optical devices)." The investigation was directed by President Trump under Executive Order 14272.
• Commercial Aircraft and Jet Engines, including parts, initiated May 1.
• Polysilicon, including derivatives, initiated July 1.
• Unmanned Aircraft Systems (UAS), including parts and components, also initiated July 1.
• Wind Turbines, including parts and components, initiated August 13.
• Robotics and Industrial Machinery, initiated September 2. This investigation "includes, among other things, robots and programmable, computer-controlled mechanical systems. This equipment spans CNC machining centers, turning and milling machines, grinding and deburring equipment, and industrial stamping and pressing machines. It also includes automatic tool changers, jigs and fixtures, and machine tools for cutting, welding, and handling work pieces. Application-specific specialty metalworking equipment used to treat, form, or cut metal, such as autoclaves and industrial ovens, metal finishing and treatment equipment, EDM machinery, and laser and water-cutting tools and machinery is also included."
• Personal Protective Equipment, Medical Consumables, and Medical Equipment, Including Devices, also initiated September 2. The notice states that personal protective equipment (PPE) "refers to PPE used in health care settings," medical consumables "refers to single-use or short-term-use items used for patient diagnosis, treatment, and prevention of conditions," medical equipment "refers broadly as durable equipment, tools, and machines used in healthcare to support patient care," and a medical device "is any instrument, apparatus, or machine used in the diagnosis, monitoring, or treatment of medical conditions."

How Importers Should Adapt

Importers first and foremost should understand this new tariff landscape. The rules are novel, complex, and evolving. Reporting requirements, such as for metal content, have increased, and enforcement proceedings or consequences for misreporting U.S. content can be severe. If uncertain whether a product is covered by a particular tariff, clarification from CBP can be sought. Consult your customs broker and trade counsel with any questions, and, as always, maintain all records in house.

Second, monitor trade news for any developments. Pending investigations may become tariff actions quickly, and new investigations may be opened at any time. Current actions may change for a number of reasons. Most proclamations direct Commerce to update the President within about one year, new trade deals providing exemptions or reduced rates may be negotiated, and the inclusions process may yield new subject derivatives. Stacking or content rules changes may arise. Be mindful, however, that an action is not legally effective until an executive or agency directive makes it so, rather than a social media post.

Third, review past unliquidated or recently liquidated entries for errors resulting in incorrect duty payments. Where your company might have overpaid on metal content, misapplied the stacking rules, or missed a trade deal exemption; or where exemptions or modified rates apply retroactively, namely at present for metals or automobiles from the European Union, consider applying for refunds. Where non-payments or underpayments of Section 232 duties on subject merchandise are discovered, consider filing a prior disclosure with CBP to protect against enforcement liability.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.