Section 232 Tariff Adjustment Procedures for Steel and Aluminum Producers Under Proclamation 1098
Trade Update • April 24, 2026
Key Points
- The U.S. Department of Commerce issued procedures for tariff adjustment applications under Presidential Proclamation 10984.
- Eligible producers in Canada and Mexico can apply starting April 23, 2026.
- Tariff reductions apply to steel and aluminum tied to new U.S. production capacity commitments.
- Adjusted tariffs may be reduced by up to 50%, but not below a 25% duty rate.
- Compliance requires strict documentation, milestone tracking, and quarterly reporting.
- Documentation must be submitted electronically to: adjustment@trade.gov.
On April 23, 2026, the Commerce Department issued a notice outlining procedures for steel and aluminum producers in Canada and Mexico to request tariff adjustments tied to new U.S. production capacity. The process supports Presidential Proclamation 10984, which imposed tariffs on medium- and heavy-duty vehicles, parts, and buses due to national security concerns. The notice defines eligibility, documentation standards, and compliance requirements for companies seeking reduced tariffs under existing Section 232 measures on steel and aluminum.
Eligibility
Qualified Companies
Only applicants that produce steel or aluminum in Canada or Mexico and supply U.S. manufacturers of automobiles or medium- and heavy-duty vehicles qualify. Supply may occur directly or indirectly through incorporation into parts.
Qualifying Commitments
Only new production commitments qualify. These commitments must expand U.S. primary steel or primary aluminum production capacity and support key products, including automobiles, automobile parts, medium- and heavy-duty vehicles, and related parts.
Qualifying Imports
Only imports that meet both conditions qualify:
- Eligible for preferential tariff treatment under the USMCA
- Melted and poured (steel) or smelted and cast (aluminum) in Canada or Mexico
Adjustments apply only to volumes equal to the projected annual new U.S. production capacity, as determined by the Department
Application Requirements
Applicants must submit project-specific documentation that includes:
- Company eligibility details, including production in Canada or Mexico and supply to U.S. manufacturers
- Project overview, including location, objectives, and current status
- Production details, including product type, capacity, and supported U.S. key products
- Lists of equipment suppliers, contractors, and raw material sources
- Hiring plans and workforce expansion
- Required milestone timelines and optional milestones, if applicable
- A project management plan with cost estimates
- A commitment to provide quarterly progress and cost reports
- A compliance statement acknowledging milestone and reporting obligations
- Designation of a single importer of record for the tariff adjustment
Mandatory Milestones
Submissions must include timelines for:
- Land acquisition
- Completion of facility design
- Engagement of construction teams or contractors
- Start of construction
- Equipment purchase
- Equipment delivery and installation
- Completion of construction and initial production
Optional milestones may include:
- Award of major construction contracts
- Award of major engineering contracts
- Submission of permitting applications
- Receipt of permits
- Finalization of financing agreements
- Hiring of engineers
- Equipment certification
Documentation must be submitted electronically to: adjustment@trade.gov.
Background Info
Presidential Proclamation 10984, issued on October 17, 2025, imposed Section 232 tariffs on imports of medium- and heavy-duty vehicles, vehicle parts, and buses to address national security concerns related to these imports. It also authorizes the Department of Commerce to adjust existing steel and aluminum tariffs under Proclamations 9704 and 9705.
The adjustment program allows tariff reductions for steel and aluminum producers in Canada or Mexico that supply U.S. manufacturers and commit to expanding production capacity in the United States. Eligibility is limited to qualifying imports that meet U.S.-Mexico-Canada Agreement (USMCA) requirements and are subject to specified origin and production criteria, with adjusted rates not falling below 25 %.
How GHY Can Help?
GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.
By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.
Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.
Subscribe!
