Section 232 Tariffs Doubled Along with Changes to Stacking Tariffs
President Donald Trump announced a sharp increase in U.S. steel and aluminum tariffs from 25% to 50%, set to take effect today, as part of a broader push to protect domestic industry and revive his “reciprocal” trade agenda. The announcement, made during a campaign-style rally at a U.S. Steel plant in Pennsylvania, coincided with his support for the company’s sale to Japan’s Nippon Steel, which he insisted would still ensure American oversight. UK steel and aluminum tariffs remain at 25% for now, but starting July 9, the Commerce Department may revise duties or quotas or raise tariffs to 50% if the UK is found noncompliant with the agreed terms.
Carried out under Section 232 of the Trade Expansion Act, the move bypasses a recent court ruling limiting the president’s tariff powers under the International Emergency Economic Powers Act (IEEPA), adding strain to already tense trade negotiations with allies ahead of a July 9 deadline. Leaders from countries such as Canada and the EU voiced opposition to the increase and vowed retaliation efforts.
According to Executive Order and CBP guidance, the administration is making changes to the stacking of tariffs from what was ordered in an Executive Order on May 2:
- For imports subject to a Section 232 Auto and Auto Parts Tariff, the Section 232 Aluminum, Section 232 Steel Tariffs, IEEPA Mexico, and Canada Tariffs do NOT apply.
- For Canadian and Mexican imports subject to a Section 232 Steel and/or Aluminum Tariffs, then the IEEPA Mexico and Canada tariffs do NOT apply.
- For imports subject to Section 232 Steel and Aluminum Tariffs, the Section 232 tariff will apply to the steel and aluminum content while reciprocal tariffs will apply to the non-steel and non-aluminum content. This is new stacking as the reciprocal tariff did not previously apply to the non-aluminum and non-steel content.
- For imports subject to a Section 232 Steel Derivative Tariff and a Section 232 Aluminum Derivative Tariff, both tariffs apply.
- For Canadian and Mexican imports, the USMCA exemption still applies.
The revised tariff stacking rules take effect June 4, 2025. However, the amended Executive Order retroactively applies to entries from March 4, 2025, allowing importers to seek refunds for excess duties paid, except for those under the Section 232 automobile and automobile part tariffs, which remain non-refundable. The Executive Order states there will be strict penalties for underreporting metal content.
Trump’s decision to double the tariffs, previously adjusted earlier this year to remove exemptions for countries like Canada and Mexico, drew criticism from trade experts and foreign officials, especially given long-standing frictions over steel transshipments and rising import levels.
ICYMI: Latest on IEEPA Court Cases
A federal judge in California dismissed the state's challenge to Trump-era tariffs imposed under IEEPA, ruling the case must be brought in the U.S. Court of International Trade (CIT), which holds exclusive jurisdiction over disputes involving tariff laws. While agreeing with other district courts in Montana and Florida that such cases fall under CIT’s authority, Judge Jacqueline Scott Corley uniquely denied the Justice Department’s request to transfer the case, instead allowing California to immediately appeal the dismissal to the Ninth Circuit. Corley emphasized that challenges to executive orders modifying the Harmonized Tariff Schedule inherently “arise out of” tariff laws, regardless of whether those orders were legally authorized, reinforcing Congress’s intent for a uniform system of customs review through the CIT.
Read the last alert from the MBS team on the cases here.
* * * *
Are you concerned about the impacts of the outlined trade issues? Please contact Sarah Helton, Michael Best Strategies’ Trade Practice Lead at sarah.helton@michaelbest.com for assistance.