Section 232 Tariff Adjustment for Steel and Aluminum Producers Under Proclamation 1098 (Updated)
Published April 24, 2026| Updated May 7, 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.
- Latest: CBP issued updated filing guidance on May 6, 2026, clarifying how approved importers must separate U.S. and non-U.S. content for MHDVs under USMCA when applying Section 232 duties tied to Proclamation 10984.
On April 23, 2026, the U.S. 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 (MHDVS) and 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.
Latest Update: CBP’s latest guidance issued on May 6, 2026 clarifies how Section 232 duties apply to MHDVs that qualify for preferential treatment under USMCA. The guidance implements provisions tied to Presidential Proclamation 10984 and confirms how importers must report duty calculations under approved Commerce Department determinations. More information below.
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.
CBP Guidance on Applying Section 232 Duties
CBP instructs importers to apply the 25% Section 232 tariff only to the value of non-U.S. content for approved MHDV entries entered on or after November 1, 2025. U.S. content receives a 0% duty rate when properly reported.
Reporting Instructions for Applying the Special Tariff Treatment
According to CBP, the non-U.S. content and the U.S. content value must be reported on two lines.
First Line: Non-U.S. Content
Report the following:
- Total quantity of imported goods
- Value of non-U.S. content approved by the Commerce Department
- Section 232 duties using HTSUS 9903.74.03
- Special Program Indicator (SPI) code “S”
- Applicable Chapter 1–97 HTSUS classification
- Country of origin (same as second line)
- All other applicable duties, including antidumping and countervailing duties
Second Line: U.S. Content
Report the following:
- Quantity as “0”
- Value of U.S. content (entered value minus non-U.S. content value)
- Section 232 duty using HTSUS 9903.74.06 (0% duty rate)
- Special Program Indicator (SPI) code “S”
- Same Chapter 1–97 HTSUS classification as first line
- Same country of origin as first line
- All other applicable duties, including antidumping and countervailing duties
For inquiries related to trade remedy programs, refer to the CBP trade remedies page or reach out directly to the Trade Remedy Branch at TradeRemedy@cbp.dhs.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.
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