The United States government announced a significant reform of Section 232 tariffs under the Trade Expansion Act for steel, aluminum, copper, and related products. The core purpose of this policy change is to simplify tariff calculations by eliminating the previous requirement to assess the content value of these metals within imported goods. Instead, tariffs will now be based on the full customs value of the entire product. This move follows persistent requests from industry and government officials for clearer and less burdensome calculation methods. The reform also excludes certain items with low metal content from tariff application, aiming to reduce unnecessary administrative complexity.
Industries directly affected include manufacturers and exporters of steel, aluminum, copper, and their derivative products, as well as sectors such as machinery, electrical equipment, automotive parts, cosmetics, chemicals, food, furniture, and lighting. Products composed primarily of these metals will face additional tariffs of 50% or 25%, while some industrial machinery and power grid equipment will temporarily incur a 15% tariff until 2027. Items with less than 15% metal content by weight are exempt from Section 232 tariffs. The reform is expected to ease the administrative burden for companies previously required to calculate metal content value, though some items may see increased tariff costs.
The new tariff calculation method will be implemented for customs entries from April 6, 2024 (Eastern Standard Time). The previous requirement for three annual derivative product applications is abolished, though the US administration retains authority to add items. The Department of Commerce will review the reform after 90 days. The Korean Ministry of Trade, Industry and Energy (MOTIE) held an emergency video conference with industry associations and related agencies on April 3, 2024, to assess impacts and discuss support measures. Further consultations are scheduled, including a planned industry meeting on April 8, 2024.
Frequently asked questions include: What products are excluded from Section 232 tariffs? Items such as cosmetics, chemicals, food, furniture, and lighting with low steel, aluminum, or copper content are excluded. How will the reform affect administrative burdens? The elimination of content value calculations is expected to reduce complexity for affected industries. Will all products face higher tariffs? Not necessarily; while some items may see increased costs, others—especially those with low metal content—will benefit from exemptions.
Metaqsol opinion: The US Section 232 tariff reform is a pragmatic response to industry calls for simpler and clearer tariff calculations. By basing tariffs on full customs value and exempting products with low metal content, the policy reduces administrative burdens and provides relief for many exporters. However, certain items may face increased costs, making ongoing consultation and review important. The government’s proactive engagement with industry stakeholders and planned support measures demonstrate a commitment to minimizing negative impacts and ensuring smooth adaptation to the new rules.