CBP Clarifies Section 232 Derivative Goods Duties

U.S. Customs and Border Protection has provided informal but consequential guidance on how importers should calculate Section 232 duties on derivative goods containing steel, aluminum, or copper, according to a note from  Deanna Okun and colleagues at Polsinelli.

The guidance addresses an ambiguity left by recent presidential proclamations extending Section 232 tariffs to derivative products: how to determine the dutiable value of the underlying metal content.

CBP’s position establishes a metal-content-based valuation framework rather than a blanket duty on the full value of all derivative goods.

Under CBP’s approach, articles composed entirely of a covered metal—such as steel products classified in Chapter 72 or aluminum products in Chapter 76 of the Harmonized Tariff Schedule—are subject to Section 232 duties on their full entered value.

By contrast, products made of both covered metals and non-covered materials are dutiable only on the portion of the entered value attributable to the covered metal.

CBP has also drawn a clear line on cost deductions. Manufacturing expenses such as fabrication, machining, finishing, coatings, and labor may not be excluded when calculating the value of the metal content.

Only the value of distinct, non-covered components may be subtracted. Where costs relate to both covered and non-covered materials, importers must reasonably allocate those costs between them.

For copper and copper-alloy derivatives, CBP applies the same logic. The agency does not permit importers to strip out the value of alloying elements in order to isolate a notional “pure copper” value; the relevant copper or copper-alloy content is treated as a whole for duty purposes.

The guidance also carries a compliance warning. If an importer cannot substantiate the value of the covered metal content, CBP may assess Section 232 duties on the total entered value of the merchandise.

Importers are therefore expected to maintain documentation supporting their valuation methodology and metal content determinations.

"CBP Guidance Regarding Section 232 Dutiable Metal Content Valuation" (Polsinelli) [Link]

Section 232 Tariffs on Steel and Aluminum Frequently Asked Questions [Link]