Last updated: 2026-07-09
Section 232 Metal Tariffs — From 25% in 2018 to 50% Full-Value Duties in 2026
What began in 2018 as a 25% tariff on steel and 10% on aluminum has, through a rapid sequence of
2025–2026 proclamations, become a 50% duty applied to the full customs value of metal products
— regardless of actual metal content — with copper added to the regime for the first time in
2025. The legal mechanism (Section 232 of the Trade Expansion Act of 1962) has not changed, but
its scope, rate, and valuation base have all expanded materially in the eighteen months to mid-2026.
1. The escalation timeline: 2018 baseline to 2026 full-value regime
Section 232 tariffs on steel and aluminum trace back to Proclamation 9704 and 9705 of 8 March
2018, which imposed the original 25% (steel) and 10% (aluminum) duties on national-security
grounds following a Commerce Department investigation
(The White House, Adjusting Imports of Aluminum and Steel Into the United States).
On 10 February 2025, Proclamation 10895 restored a true 25% tariff on steel and raised
aluminum to 25% as well, closing prior country exemptions and product exclusions
(The White House, Fact Sheet: President Trump Restores Section 232 Tariffs).
Effective 12:01 a.m. EDT on 4 June 2025, both rates were doubled to 50%
ad valorem, applied to the steel content of Chapter 73 articles and the aluminum content of
Chapter 76 articles, with non-metal content separately subject to reciprocal tariffs under Executive Order
14257 (The White House, Adjusting Imports of Aluminum and Steel Into the United States).
Copper entered the regime for the first time via Proclamation 10962 of 30 July
2025. Then, effective 12:01 a.m. EDT on 6 April 2026, Proclamation 11021
fundamentally changed the valuation methodology: tariffs on aluminum, steel, and copper articles and their
derivatives were extended to apply to the full customs value of the imported product, regardless
of metal content, rather than only the metal-content portion, with the general rate set at
50% ad valorem for aluminum and steel articles and most copper articles, and 25%
ad valorem for certain copper articles and aluminum/steel derivative articles
(The White House, Strengthening Actions Taken to Adjust Imports of Aluminum, Steel, and Copper Into the United States).
2. The June 2026 refinement: country carve-outs and the U.S.-content threshold
A further proclamation effective 12:01 a.m. EDT on 8 June 2026 refined the April 2026
regime for a defined set of trading partners. For products of Argentina, Ecuador, El Salvador,
Guatemala, Japan, South Korea, Liechtenstein, Switzerland, Taiwan, the United Kingdom, and EU member
states, the additional Section 232 rate is now calculated relative to each product's existing
Column 1 HTSUS duty rate: if that base rate is below 15%, the combined rate is topped up
to exactly 15%; if the base rate is already at or above 15%, no
additional Section 232 duty applies at all
(The White House, Further Adjusting the Tariff Regimes for Imports of Aluminum, Steel, and Copper Into the United States).
Derivative articles made entirely of U.S.-smelted-and-cast aluminum or U.S.-melted-and-poured
steel qualify for a reduced 10% rate, and the proclamation lowered the domestic-content
bar for that treatment from a 95% to an 85% by-weight threshold for aluminum, steel, and
copper content deemed entirely U.S.-origin, effective for imports beginning 1 January 2028
(The White House, Further Adjusting the Tariff Regimes).
For Canada and Mexico, products qualifying for USMCA preferential treatment face the 25% duty only on their
non-U.S. content — defined as total value minus the value attributable to U.S.-made
parts — though the combined effective duty may not fall below 15% ad valorem
(The White House, Further Adjusting the Tariff Regimes).
Separately, trade-compliance advisories note that products composed of 15% or less by weight
of steel or aluminum (outside HTSUS Chapters 72, 73, 74, or 76) fall outside Section 232 metals-tariff scope
entirely, and U.S. Customs and Border Protection is authorized to impose penalties on importers found to
have committed fraud or deliberate misrepresentation regarding a product's U.S.-content claims
(Sandler, Travis & Rosenberg, Section 232 Tariffs on Steel & Aluminum;
The White House, Further Adjusting the Tariff Regimes).
The current clause (2) rate regime runs from 8 June 2026 until 11:59 p.m. EST on 31 December
2027, at which point the rates specified for 2028 (including the 85% U.S.-content threshold) take
effect (The White House, Further Adjusting the Tariff Regimes).
3. WTO litigation: national-security defense rejected, but no practical remedy
The Section 232 metals tariffs have been under sustained WTO challenge since 2018. In December
2022, a WTO dispute panel ruled on complaints brought by China, Norway, Switzerland, and
Turkey that the original steel and aluminum tariffs violated GATT 1994 obligations and could not
be justified under the Article XXI(b)(iii) national-security exception, because they were
not “taken in time of war or other emergency in international relations”
(Argus Media, WTO Rules US Steel, Al Tariffs Unwarranted).
The panel explicitly rejected the U.S. position that national-security determinations are entirely
self-judging and non-reviewable, establishing a binding precedent limiting how far WTO members can invoke
Article XXI as an unreviewable shield — a ruling with direct implications for over 30 other pending
disputes that invoke the same defense
(Inside U.S. Trade, WTO Panels Reject U.S. National Security Claims for Section 232 Tariffs).
The practical effect has been minimal: the U.S. Trade Representative's office rejected the panel's findings
as exceeding the WTO's authority to “second-guess” a member's national-security determinations,
and because the U.S. effectively paralyzed the WTO's Appellate Body in 2019 by blocking new appointments,
there is no functioning appellate mechanism to hear a U.S. appeal — leaving the tariffs in force
despite the adverse rulings
(Metals Service Center Institute, What the WTO Ruling Against U.S. Section 232 Tariffs Means).
In a related but distinct 2023 ruling, a separate WTO panel found in the U.S.'s favor that China's
retaliatory tariffs against Section 232 measures were themselves unlawful, since the national-security
exception does not entitle other members to impose rebalancing safeguard-style measures in response
(USTR, Statement on WTO Panel Ruling, 16 August 2023).
Current status (July 2026):
Section 232 duties on steel, aluminum, and copper stand at up to 50% ad valorem on full customs value,
with a country-specific 15%-floor mechanism for a defined group of trading partners and a lower 10% rate
for products verified as entirely U.S.-metal-content. Watch: the scheduled 1 January 2028
shift to an 85% U.S.-content threshold, continued CBP fraud-enforcement actions on content claims, and
whether any WTO member escalates beyond the current unenforceable panel rulings.
Last updated: 2026-07-09
EU CBAM Enters Its Definitive Phase — Carbon Costs Now Attach to Every Tonne of Imported Steel and Aluminium
1 January 2026 was the hard deadline that converted the EU's Carbon Border Adjustment Mechanism
from a reporting exercise into a real financial liability. Metals importers must now hold
Authorised CBAM Declarant status, verify embedded emissions through accredited third parties, and —
from 2027 — buy certificates priced against a published quarterly benchmark that hit €75.36 per
tonne of CO2 in its first reading.
1. From transitional reporting to definitive financial liability
CBAM's Transitional Period ran from 1 October 2023 to 31 December 2025, requiring
quarterly emissions reporting without any financial adjustment; the Definitive Period began on
1 January 2026, converting that reporting obligation into a real carbon-cost exposure covering
cement, iron and steel, aluminium, fertilisers, hydrogen, and electricity
(European Commission Taxation and Customs Union, Reminder: CBAM Goes Live on 1 January 2026).
A grace period at EU borders extended to the end of March 2026, but since 1 April 2026,
only authorised CBAM declarants may bring in-scope goods into the EU
(CMS Law, EU CBAM: Implementation, Pricing, and Compliance Strategies).
The European Commission published the CBAM's first-ever quarterly reference price on 7 April
2026, at €75.36 per tonne of CO2, calculated from the average EU Emissions
Trading System price over the preceding three months; subsequent 2026 publication dates fall on 6 July,
5 October, and 4 January 2027, after which pricing shifts to a weekly cycle from 2027
(CMS Law, EU CBAM: Implementation, Pricing, and Compliance Strategies).
Under a de minimis threshold introduced for the definitive period, importers of iron and steel, aluminium,
cement, and fertilisers whose cumulative annual imports do not exceed 50 tonnes are
exempt from authorisation, declaration, and certificate obligations — though electricity and
hydrogen remain in scope regardless of volume, and exceeding the threshold at any point during the year
brings the importer's entire annual volume into scope
(BSI, Preparing for EU CBAM: The 2026-2027 Transition Explained).
2. Emissions verification, direct-vs-indirect treatment, and penalties
From 1 January 2026, EU importers may only report actual emissions data in their CBAM
declarations if verified by an accredited third-party verifier operating under CBAM-specific principles
aligned with the EU ETS; where verified actuals are unavailable, importers must fall back on
Commission-default values established under Implementing Regulation (EU) 2025/2621
(BSI, Preparing for EU CBAM: The 2026-2027 Transition Explained).
Treatment differs by sector: for iron and steel and aluminium, only direct production emissions
are priced and surrendered under CBAM, while indirect electricity emissions are excluded for
these two sectors; cement and fertiliser imports, by contrast, must account for both direct and indirect
emissions from the start of the definitive regime
(BSI, Preparing for EU CBAM: The 2026-2027 Transition Explained).
Default emissions intensities used as the fallback benchmark are notably steep for metals: primary
aluminium from smelting carries a default range of roughly 8–18 tonnes of CO2 per tonne of
metal depending on energy mix (with 16.5 t CO2/t cited as the default for coal-powered smelters),
while converter steel runs in the 1.6–2.4 t CO2/t range
(OmniMES, CBAM for Steel, Aluminium and Cement Exporters).
Under Article 26 of CBAM Regulation 2023/956, failure to report carries a penalty of
€10–50 per tonne of CO2 not declared, inaccurate reporting carries
€30–50 per tonne plus a 30-day correction requirement, and — once certificate-surrender
obligations begin in 2027 — missing certificates trigger a flat €100
per tonne penalty with no cap, plus a market-access ban on further consignments from the
non-compliant importer
(OmniMES, CBAM for Steel, Aluminium and Cement Exporters).
The first annual CBAM declaration covering all 2026 imports, together with certificate surrender, falls due
by 31 May 2027 in most current guidance (some earlier Commission documents cite 30
September 2027 as the deadline for the first declaration under the original regulatory design)
(Coolset, CBAM Timeline, Deadlines and Phases: What to Expect in 2026;
European Commission, COM(2025) 989).
3. The 2028 downstream expansion and full phase-in through 2034
The European Commission has adopted implementing and delegated acts extending CBAM's scope to specific
steel- and aluminium-intensive downstream products effective 1 January
2028, and a December 2025 Commission proposal separately outlines plans to enhance traceability
requirements and address emission-intensity misdeclaration, alongside proposed fines of up to 4%
of global turnover for repeat reporting offences
(European Outdoor Group, Commission Extends CBAM Scope to More Aluminium/Steel Downstream Products;
OmniMES, CBAM for Steel, Aluminium and Cement Exporters).
The mechanism's carbon-cost exposure is itself a moving target through the next decade: free allocation
under the EU ETS phases out gradually so that CBAM's embedded-emissions coverage rises incrementally from
2026, reaching 100% coverage only from 2034, at which point EU domestic producers and
non-EU importers face economically equivalent carbon costs
(European Commission, Guidance Document on CBAM Implementation for Installation Operators Outside the EU).
For metals producers and traders supplying the EU — including any tokenized-metal platform whose
physical backing chain touches EU-bound aluminium or steel — this creates a multi-year compliance
runway in which today's default-value fallback costs are deliberately set higher than verified-actual
costs, precisely to push the market toward primary emissions data collection well before the 2027
certificate-surrender deadline bites.
Current status (July 2026):
CBAM's definitive phase is live, with the first quarterly reference price published in April 2026 and
authorised-declarant status now a precondition for clearing in-scope metals through EU customs.
Watch: the 2027 shift to certificate-surrender obligations and weekly pricing, the 1
January 2028 downstream-product scope expansion, and the proposed 4%-of-turnover penalty regime for repeat
non-compliance.
Last updated: 2026-07-09
HS Classification for Refined Metals and Hong Kong's Zero-Tariff Free-Port Model
Precious-metals customs treatment diverges sharply by jurisdiction: Hong Kong charges no import or
export tariff on any goods, including bullion, while most other jurisdictions rely on a detailed
Harmonized System classification under Chapter 71 to determine duty, VAT/GST exemption eligibility, and
Section 232/CBAM applicability. Getting the HS code wrong is not a paperwork formality —
it determines whether a shipment is dutiable at all.
1. Hong Kong: a genuine zero-tariff free port, precious metals included
Hong Kong's Trade and Industry Department states unambiguously that Hong Kong “is a free port,”
pursues “a free trade policy,” and does not maintain barriers on trade:
no tariff is charged on the import or export of goods generally
(Hong Kong Trade and Industry Department, Hong Kong's Trade Policy).
Licensing requirements exist only for a narrow set of goods to fulfil international obligations or meet
public-health, safety, or security needs, and the department describes those licensing procedures as
deliberately simplified
(Hong Kong Trade and Industry Department, Hong Kong's Trade Policy).
This zero-tariff baseline is a structural reason Hong Kong has become a preferred Asian gateway for
physical bullion movement and for the LME's 2025 base-metals delivery-point expansion discussed elsewhere
in this ecosystem: unlike jurisdictions layering VAT, GST, or customs duty on metals shipments, Hong Kong
imposes none of these at the border, leaving only the narrower dutiable-commodities regime (covering
items such as liquor, tobacco, hydrocarbon oil, and methyl alcohol, not precious metals) administered by
Hong Kong Customs and Excise
(Hong Kong Customs and Excise, User Guidebook for Dutiable Commodities).
Reflecting this posture, Hong Kong's Financial Services and the Treasury Bureau confirmed in May 2026 that
there are currently no tariffs or import/export controls on travelers carrying gold into
or out of the territory, while noting the government continues to explore more convenient arrangements for
such movements — a live policy question given rising cross-border gold-tourism and bullion-arbitrage
flows tied to Hong Kong's expanding role in the regional gold trade
(DotDotNews, FSTB: No Tariffs or Import/Export Controls Currently for Travelers Carrying Gold).
2. HS Chapter 71: the global classification backbone for refined precious metals
Virtually every jurisdiction's customs tariff schedule builds on the World Customs Organization's
Harmonized System (HS), and precious metals sit within Chapter 71
(“Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad with
precious metal, and articles thereof; imitation jewellery; coin”)
(European Commission Taxation and Customs Union, Section XIV of the Combined Nomenclature).
Refined gold bars fall under heading 7108, with subheading 7108.12
(and national extensions such as 7108.12.10, 7108.1210, and 7108.1290) covering non-monetary gold in
unwrought or semi-manufactured forms, 7108.11 covering monetary-grade powder, and
7108.20 reserved specifically for monetary gold — a distinct
subheading that matters because monetary gold held by central banks and monetary authorities is typically
treated differently from commercial bullion for both customs and balance-of-payments purposes
(Deepbeez, HS Code for Gold Bar — 2025 Update;
Metalspread, HS Code Directory: Gold and Silver (Chapter 71)).
Silver bars and semi-manufactured forms classify under heading 7106, with subheadings
distinguishing unwrought silver (7106.10), powder (7106.91), and semi-manufactured forms (7106.92,
including national extension 7106.92.00 for semi-manufactured silver)
(TariffNumber, HS Code 7106.92.00 — Silver Semi-Manufactured Forms;
Metalspread, HS Code Directory: Gold and Silver).
Platinum falls under heading 7110 (unwrought or in powder form) and 7111
for base metals, silver, or gold clad with platinum, while waste and scrap of precious metals or clad
metals classify separately under headings 7112 and 7115 for other
articles
(Metalspread, HS Code Directory: Gold and Silver).
3. Why classification determines Section 232 and GST/VAT-exemption eligibility
Precise HS classification is not academic: Section 232's own metal-content tariff mechanics reference HTSUS
chapters directly — the additional ad valorem duties apply “only to the steel content of
articles in Chapter 73” and “only to the aluminum content of articles in Chapter 76,”
meaning a product's chapter placement is what triggers or excludes Section 232 exposure in the first
instance
(The White House, Adjusting Imports of Aluminum and Steel Into the United States).
Refined bullion under HS 7108 (gold) and 7106 (silver) sits outside Chapters 73 and 76 entirely, which is
why investment-grade bullion has not been swept into the Section 232 metals-tariff regime the way
structural steel and aluminum extrusions have. Singapore's GST exemption for Investment Precious
Metals similarly hinges on both a purity threshold (99.5%+ gold, 99.9%+ silver, 99%+ platinum) and
correct classification under the HS codes Singapore Customs designates for IPM-eligible goods, with
Singapore Customs publishing its own dedicated HS Codes for IPMs reference precisely
because misclassification risks losing the exemption
(Singapore Customs, HS Codes for IPMs).
India's bullion trade illustrates the same dynamic from the opposite direction: the Bullion World trade
press reported in June 2025 that India introduced distinct HSN codes specifically to
separate categories of imported gold and gold-alloy products, a reclassification exercise driven by the
need for more granular trade-data visibility and duty administration as gold-import volumes and forms
diversify
(Bullion World, India Introduces Distinct HSN Codes).
For any tokenized-metal issuer sourcing physical backing across multiple jurisdictions, this means the tax
and tariff treatment of the underlying bar can differ meaningfully depending on which HS subheading customs
officials in the origin and destination countries assign to that specific bar or ingot form.
Current status (July 2026):
Hong Kong remains a genuine zero-tariff free port for bullion and virtually all other goods, reinforcing
its role as an Asian physical-metals gateway, while HS Chapter 71 classification continues to determine
duty and exemption eligibility for refined metals in every other major jurisdiction. Watch:
whether Hong Kong formalizes new arrangements for cross-border gold-carrying by travelers, and whether more
jurisdictions follow India's 2025 lead in introducing more granular gold-specific HS/HSN subheadings.