Trump administration introduces shift to full-value tariffs on derivative imports

Shift from content-based tariffs

The April 2 proclamation states that tariffs on steel and aluminum articles and their derivative products will apply to the full customs value of the imported good, regardless of metal content.

Under the prior system, derivative products are subject to tariffs of up to 50% that applied only to the value of the steel or aluminum content within a product.

The updated framework applies tariffs to the full value of imported goods across both 50% and 25% duty tiers, replacing the content-based methodology for derivative products.

That change would adjust how duties are calculated across a wide range of downstream goods.

Tiered structure implemented

The proclamation establishes a tiered tariff structure across aluminum and aluminum-containing products.

Full-value tariffs of 50% apply to aluminum articles and certain derivative products, while other derivative categories are subject to 25% duties. Lower rates are available in specific cases, including for products made entirely with US-origin metal or certain imports from the United Kingdom.

Classification will play a larger role in determining tariff exposure, particularly for goods that contain varying shares of steel and aluminum.

Potential cost effects

Although the nominal tariff rate would be lower for some products, the change in methodology increases the base on which duties are applied.

Applying tariffs to the full value of a finished good would increase the assessed duty in cases where the metal content represents only a portion of the product’s total value.

That effect would be more pronounced for downstream goods such as automotive components, machinery, and consumer products, where steel or aluminum is one input among several.

At the same time, the updated structure removes the need to calculate aluminum content in imported products, which had added complexity under the prior system.

Derivative inclusion process replaced

The proclamation also ends the petition-based process used to expand the scope of derivative tariffs.

In prior rounds, the Bureau of Industry and Security, part of the Department of Commerce, accepted petitions, opened public comment periods, and issued determinations on whether additional products would be subject to tariffs.

The new framework allows the Department of Commerce, alongside the Office of the US Trade Representative (USTR), which sits within the Executive Office of the President, to added derivative products on a rolling basis.

Both Commerce Department officials and the US Trade Representative are presidential appointees confirmed by the Senate, and the updated framework introduces a new formal role for the USTR in determining the scope of derivatives.

The change replaces the petition-based derivative inclusion process administered by the Bureau of Industry and Security which had faced delays.

The most recent petition window, which ran from Sept. 15-29, 2025, has not yet resulted in a determination. That window followed the addition of over 400 steel and 200 aluminum HTS codes, effective Aug. 18, 2025, after a June 4, 2025, expansion that had already added hundreds of steel and aluminum derivative products.

Tariff policy evolution

The changes take effect April 6, 2026.

The news comes about a year after the Trump administration’s “Liberation Day” tariffs, which were imposed under the International Emergency Economic Power Act (IEEPA).

Both The Wall Street Journal and Bloomberg reported the changes follow months of discussion within the administration on how to simplify tariff enforcement.

The US Supreme Court later invalidated those tariffs in a Feb. 20, 2026, decision that found that using IEEPA authority for broad-based tariffs was not permitted under the statute.

SMA, AISI cheer

Steel Manufacturers Association (SMA) President and CEO Philip K. Bell strongly supports President Trump’s actions.

“The Steel Manufacturers Association applauds the Trump Administration’s actions today to strengthen the Section 232 steel tariffs,” Bell said in a statement on Thursday.

“By right-sizing the derivatives list and updating the valuation of steel-containing goods, these measures reinforce President Trump’s signature trade achievement,” he added.

Bell also highlighted the fundamental importance of the Section 232 tariffs.

“A strong Section 232 framework is essential to our national and economic security,” he said. “Previously, the valuation method based solely on steel content was exploited by bad-faith importers, who used loopholes to underreport value and avoid paying the full cost of tariffs.”

He labeled President Trump’s update a “critical fix.”

“It will help restore fairness, encourage domestic production, and ensure imports are properly valued,” Bell said. 

Likewise, Kevin Dempsey, president and CEO of the American Iron and Steel Institute (AISI), was in favor of President Trump’s action.

“AISI commends the decisive action taken today by President Trump to ensure that all steel mill products, including steel pipe and tube, receive the full benefit of the 50% tariffs on steel products,” he said in a statement on Thursday.

“We also welcome the steps being taken today to simplify the process for applying the steel tariffs to critical steel derivative products,” he continued.

Dempsey noted the Section 232 tariffs “remain essential to address the adverse impacts of global steel excess capacity that continues to grow due to foreign subsidies and other trade-distorting practices.”

Editor’s note

A version of this story was first published by SMU sister publication Aluminum Market Update.