Section 232 tariffs expand as new metals and pharmaceutical measures take effect

The administration’s latest expansion of Section 232 tariffs introduces higher duty rates, broader product coverage and new country-specific distinctions that will directly affect import costs and sourcing decisions. At the same time, a separate tariff framework targeting pharmaceutical products signals a more coordinated approach linking trade policy with domestic manufacturing and pricing objectives. Subsequent technical corrections issued in April 2026 further refine how these measures are applied, particularly for HTS classification and reporting.

The following summary outlines the key provisions of these measures and their applicability across industries.

Expansion of Section 232 tariffs on metals

Section 232 tariffs were first introduced in 2018 on steel and aluminum imports as part of a national security initiative, establishing baseline duties that have since been modified through quotas, exclusions and country-specific agreements. The administration’s latest action builds on this framework by expanding both the scope and rate structure of these measures.

On April 2, 2026, the President issued a proclamation expanding Section 232 tariffs to include copper and a broader range of derivative products, while increasing duty rates and introducing more detailed distinctions based on product composition and country of origin. Additional technical corrections to this proclamation were published in April 2026 and are effective for entries on or after April 6, 2026. These updates include revisions to HTS Note 16 and the introduction of a new Chapter 99 reporting subheading.

Under the updated measures, additional duties ranging from 10% to 50% will apply to the full customs value of certain imports of steel, aluminum, copper articles and their derivatives from all countries, effective April 6, 2026. This represents a significant expansion of existing Section 232 tariff measures.

Key provisions include:

• Articles made entirely or almost entirely of aluminum, steel or copper (for example, steel coils or aluminum sheets) will be subject to a 50% tariff on the full customs value.
• Articles of aluminum or steel that are products of the United Kingdom, with at least 95% of the aluminum melted or cast in the United Kingdom and 95% of the steel melted and poured in the United Kingdom, will be subject to a 25% tariff on their full value. This treatment has been clarified to continue applying to certain Tata Steel UK products, even where the melt-and-pour country is the Netherlands, through January 1, 2028.
• Derivative articles substantially made of steel, aluminum or copper will be subject to a flat 25% tariff on their full customs value.
• Derivative aluminum or steel articles that are products of the United Kingdom, with at least 95% of the aluminum melted or cast in the United Kingdom and 95% of the steel melted and poured in the United Kingdom, will be subject to a 15% tariff on their full value.
• Certain metal-intensive industrial equipment and electrical grid equipment will be subject to a 15% tariff through 2027.
• Products made abroad, containing at least 95% U.S.-melted and poured steel, or U.S.-smelted and cast aluminum or copper, will be subject to a 10% tariff.
• Goods classified as articles or derivatives of more than one metal will only be subject to one of the respective duty rates, even if the good contains multiple metals.
• Goods (except those classifiable in Chapters 72, 73, 74 and 76 of the Harmonized Tariff Schedule of the U.S. (HTSUS)) may qualify for a de minimis exception. Under this provision, products containing less than 15% by weight of steel, aluminum or copper are not subject to Section 232 tariffs. Recent guidance further clarifies that Section 232 duties apply only to articles that actually contain aluminum, steel or copper, or their derivatives. Goods captured under U.S. Note 16 reporting provisions that do not contain these metals are not subject to Section 232 duties but must still be reported under a new Chapter 99 classification.
• To support this distinction, a new Chapter 99 subheading (9903.82.01) has been established for goods entered under U.S. Note 16 that do not contain aluminum, steel or copper. This ensures proper reporting while confirming that these goods are not subject to Section 232 duties.

Tariff measures on pharmaceuticals and pharmaceutical ingredients

In addition to Section 232 tariffs on metals, the administration issued a second proclamation establishing a new tariff framework for pharmaceutical products and ingredients. This action introduces a tiered tariff structure tied to country of origin and participation in specific government programs, reflecting broader policy objectives related to pricing and domestic production.

Under the proclamation, a tiered 20% to 100% tariff hierarchy will be applied on patented pharmaceutical products and ingredients. These tariffs will take effect on July 31, 2026, for companies listed in Annex III and September 29, 2026, for other companies.

Stated provisions for trade agreement countries include:

• Pharmaceutical products from the European Union, Japan, South Korea, Switzerland or Liechtenstein will be subject to a 15% tariff.
• Pharmaceutical products from the United Kingdom (UK) will be subject to a 10% tariff, subject to the UK pharmaceutical agreement.

Additional provisions for company participation include:

• Companies that enter into a Most Favored Nation (MFN) pricing agreement with the Department of Health and Human Services (HHS) will be eligible for a 0% tariff through January 20, 2029.
• Companies that enter only into onshoring agreements with the Department of Commerce (DOC) will be subject to a 20% tariff.
• The DOC and HHS will develop frameworks and criteria for participation in both onshoring and MFN pricing programs.

Product category considerations include:

• Genetic pharmaceutical products, biosimilars and associated agreements are not subject to tariffs at this time.
• Certain specialty pharmaceuticals may be conditionally eligible for 0% tariffs, including orphan drugs, animal health products and other specialty pharmaceuticals (provided they originate from trade agreement countries and address an urgent public health need), as well as nuclear medicines, plasma-derived therapies and fertility treatments.

Considerations for companies navigating Section 232 tariffs

Collectively, these measures introduce increased complexity in tariff exposure across both industrial and life sciences sectors. The expansion of Section 232 tariffs, combined with new pharmaceutical tariff structures, may require companies to reassess sourcing strategies, cost structures and participation in government programs as additional regulatory guidance is developed.

Organizations impacted by these changes may benefit from evaluating product classifications, supply chain configurations and eligibility for preferential treatment or exemptions under the updated frameworks. Companies should also consider modeling tariff exposure across sourcing scenarios, reviewing contract terms and assessing opportunities to align with program requirements tied to reduced duty rates. In light of recent clarifications, companies should review HTS classifications and broker reporting processes to ensure alignment with updated Note 16 requirements and the new 9903.82.01 subheading, particularly for goods that may not contain covered metals.

Baker Tilly’s global trade management team works with organizations to navigate these types of trade policy changes through detailed tariff impact modeling, classification analysis and supply chain strategy. This includes evaluating alternative sourcing approaches, identifying eligibility for exemptions or preferential treatment and supporting decision-making related to participation in government programs. As these measures evolve, a structured approach to analysis and planning can help companies manage risk and identify potential cost mitigation opportunities.