Calculate basic customs duties, safeguard levies, and regulatory tariffs on iron, steel, and scrap metals.
# Iron, Steel & Metal Scrap Import Duty Guide: Section 232 Customs Tariffs
Importing raw metals, steel structures, and scrap metals requires navigating some of the most dynamic protectionist trade policies in modern customs compliance. Sourcing managers and metal recyclers must comply with strict national security tariffs, trade safeguards, and classification rules. Under current trade enforcement guidelines, metals face heavy protective surcharges designed to support domestic smelters and steel mills.
Section 232 Surcharges: Wholly-Of vs. Derivative Products
The cornerstone of metal import compliance is the Section 232 national security tariff schedule (enforced under the Trade Expansion Act of 1962). Realigned under recent trade actions, Section 232 applies heavy surcharges to steel and aluminum imports depending on the product classification:
- Wholly-Of Metal Products (50% Surcharge): Raw steel bars, structural beams, copper pipes, and aluminum coils classified under HTS Chapters 72 and 73 are subject to a 50% flat ad-valorem surcharge. This surcharge is added on top of the standard MFN tariff rate, effectively raising the importing cost by half.
- Derivative Metal Products (25% Surcharge): Finished articles substantially manufactured from steel, aluminum, or copper (such as metal fasteners, bolts, nails, and wire products) face a 25% ad-valorem surcharge.
Within Chapter 72, classification distinguishes between carbon steel, alloy steel, and stainless steel. Alloy additions (such as chromium, nickel, or molybdenum) change the baseline MFN tariff from 0% to up to 10% even before Section 232 surcharges are stacked, requiring precise laboratory analysis. Primary steel structures (like H-beams and sheet piling under HTS 7308) face a 50% Section 232 surcharge plus standard duties, and are subject to heavy anti-dumping and countervailing duty (AD/CVD) cases that can exceed 100% depending on Commerce Department rulings. Sourcing teams must verify the specific chemical mill test reports to prevent misclassifying alloy steel as non-alloy. Sourcing managers must verify chemical mill test reports to check alloy content, as misclassification to avoid Section 232 can lead to severe fines.
The Full-Value Valuation Surcharge Hook
A common misclassification error made by importers is calculating the Section 232 surcharge only on the raw metal content value of a finished product.
- CBP Enforcement Rule: U.S. Customs and Border Protection (CBP) calculates the 25% or 50% Section 232 surcharge on the FULL transaction value (FOB/CIF) of the imported article, including the costs of processing, machining, fabrication, and packaging.
- Impact: If you import a specialized steel assembly worth $100,000 where the raw steel value is only $10,000, the 25% Section 232 surcharge is applied to the full $100,000 value, resulting in a $25,000 tariff surcharge, not $2,500. This makes finished metal derivatives highly vulnerable to price inflation at the border.
Additionally, under the Steel Import Monitoring and Analysis (SIMA) licensing program, commercial steel importers must register their cargo with the Department of Commerce and obtain a valid SIMA license number prior to filing the CBP entry summary, or face immediate border holds. Scrap metal imports are also subject to environmental standards and may face border carbon adjustments (such as the EU's CBAM carbon levy) designed to tax embedded emissions on non-recyclable primary metals. Commercial metal scrap entries must declare the gross weight in metric tons, net clean weight, and carry certified yard bill of sale files. Sourcing officers must verify that scrap metal cargo does not contain hazardous waste materials, which trigger immediate EPA containment protocols and heavy border clearance penalties. If any radioactive or hazardous material is detected during border scanning, CBP will quarantine the entire shipment, resulting in catastrophic loss of cargo value.
Section 232 Portal & Exclusion Request Slabs
Importers facing heavy Section 232 surcharges can apply for relief through the official Section 232 Exclusion Portal:
- Sourcing managers must submit a formal request showing that the specific metal grade or dimension required for manufacturing is not produced domestically in the United States in sufficient commercial quantity or quality.
- Domestic steel producers have a standard 30-day window to object. If no valid objection is filed, CBP will grant a one-year duty waiver, allowing the importer to clear cargo duty-free under the exclusion number. Managing these exclusion requests proactively is essential to avoiding 50% surcharges on specialty alloys.
Worked Landed Cost Example: Finished Steel Bolts vs. Raw Steel Scrap
To illustrate how Section 232 impacts metal cargo, let us model two shipments imported from a non-exempt country (e.g., China) into the United States on a FOB basis.
Case A: Raw Carbon Steel Scrap Metal (HTS 7204.49.00)
- FOB Value of Goods: $40,000
- Base Tariff Rate: 0.0% (Duty-Free MFN)
- Section 232 Surcharge: 50.0% (Wholly of steel)
- Basic Customs Duty: $0.00
- Section 232 Tariff Due: $40,000 × 50% = $20,000.00
- Merchandise Processing Fee (MPF): $40,000 × 0.3464% = $138.56
- Total Landed Surcharges: $20,138.56 USD
- Total Landed Cost: $60,138.56 USD
Case B: Finished Industrial Steel Bolts (HTS 7318.15.20)
- FOB Value of Goods: $40,000
- Base Tariff Rate: 8.5% (MFN Rate)
- Section 232 Surcharge: 25.0% (Derivative product)
- Basic Customs Duty: $40,000 × 8.5% = $3,400.00
- Section 232 Tariff Due: $40,000 × 25% = $10,000.00
- Merchandise Processing Fee (MPF): $40,000 × 0.3464% = $138.56
- Total Landed Surcharges: $13,538.56 USD
- Total Landed Cost: $53,538.56 USD
Country Exemptions & Preferential Rules
While Section 232 is generally applied to all foreign imports, specific trade treaties provide critical exemptions:
- USMCA Exemptions (Canada and Mexico): Under USMCA guidelines, steel and aluminum imports originating from Canada and Mexico are exempt from Section 232 tariffs. However, to qualify, importers must supply a melt-and-pour certificate proving the raw metal was smelted and poured within North America.
- Bilateral Quota Systems (EU and UK): The EU and the United Kingdom have negotiated Tariff-Rate Quotas (TRQs). Under these quotas, a set volume of steel can enter the US duty-free annually. Imports exceeding the quota are subject to the standard 25% or 50% surcharges.
Frequently Asked Questions
Does Section 232 apply to scrap metal?
Yes. Section 232 tariffs apply to all steel scrap (HTS 7204) and aluminum scrap (HTS 7602) imports, unless the shipment originates from an exempt country (such as Canada or Mexico) and is accompanied by a valid Certificate of Origin.
What is a 'melt-and-pour' certificate?
A melt-and-pour certificate is a compliance document that tracks where raw steel was originally melted and poured. CBP requires this certificate for all steel imports to verify the country of origin and determine eligibility for Section 232 exemptions.
Is steel imported from Canada exempt from tariffs?
Yes, steel imported from Canada is exempt from Section 232 surcharges under the USMCA. However, if the steel was originally melted in another country (such as China or Russia) and simply rolled or processed in Canada, it does not qualify for the exemption.
How does the 25% surcharge apply to derivative steel products?
The 25% Section 232 surcharge applies to the full transaction value of finished derivative products (such as nails, staples, and fasteners), not just the raw metal content. The surcharge is added on top of standard HTS MFN duties.
What are the risks of misclassifying steel scrap?
Misclassifying finished steel products as scrap metal to avoid duties is considered customs fraud. CBP can issue severe financial penalties, seize the cargo, and audit historical imports, potentially holding the importer liable for back-tariffs.