US Overhauls Section 232 Metal Tariffs, Shifting to Finished-Good Value Basis; Winners and Losers Emerge

The United States has revised its Section 232 tariffs on metals, now calculating duties based on the full price of a finished product instead of just its metal content.

This change benefits certain sectors, as power grid equipment like transformers receives a temporary tariff cap of 15%, and products with less than 15% metal content are now exempt.

Conversely, products with high metal content, such as some home appliances and machinery, may face higher costs as tariffs of up to 25% will apply to their entire value.

The United States has fundamentally changed its rules for taxing imported metal products under the Section 232 trade law.

The most significant change is the shift in the tax base. Previously, for many derivative products, tariffs were calculated based on the value of the steel or aluminum content within them—a complicated and often disputed process. Now, the system has been simplified: tariffs are applied to the 'entered customs value', which is the full price of the finished product. This reform introduces a new tariff structure, generally set at 50% or 25%, with a temporary 15% cap for specific strategic items.

So, why this change now? There are a few key reasons. First, the previous content-based system, introduced in June 2025, created significant administrative burdens and uncertainty for both customs officials and businesses. Second, a recent Supreme Court ruling limited the administration's ability to use other broad tariff powers, making Section 232 a more critical—and thus necessary to refine—tool for trade policy. Third, over the past year, the U.S. has expanded Section 232 to cover more products like copper and semiconductors, and this overhaul helps to create a more coherent and manageable system for this wider scope.

For Korean companies, this reform creates a clear split between winners and losers. The biggest beneficiaries are exporters of heavy electrical equipment. Products like ultra-high-voltage transformers and switchgear are included in a special category (Annex III) that caps their tariff at 15% until the end of 2027. This is a substantial relief from the previous 25% rate and could provide a significant competitive edge in the U.S. market. Additionally, products with low metal content (under 15%), such as cosmetics or toys in metal containers, are now exempt, removing a major headache for those industries.

However, the story is different for manufacturers of products with a high proportion of metal. For some home appliances, machinery, and automotive parts, the 25% tariff will now be applied to the entire product's value, not just the metal. This could lead to a noticeable increase in their overall tariff burden, forcing them to either absorb the cost or pass it on to consumers.

In essence, this policy simplifies the 'how' of tariff collection but complicates the 'how much' depending on the product. The focus has shifted from a complex analysis of materials to a straightforward calculation based on final price, redrawing the trade landscape for metal-related goods.

Section 232: A provision of the U.S. Trade Expansion Act of 1962 that allows the President to impose tariffs on imports if they are determined to threaten national security.
Entered Customs Value: The total value of an imported good as declared to customs authorities. It typically includes the cost of the product, freight, and insurance.
HTS Code (Harmonized Tariff Schedule Code): An internationally standardized system of names and numbers to classify traded products. Customs authorities use HTS codes to determine tariff rates.

US Overhauls Section 232 Metal Tariffs, Shifting to Finished-Good Value Basis; Winners and Losers Emerge

The United States has revised its Section 232 tariffs on metals, now calculating duties based on the full price of a finished product instead of just its metal content.

This change benefits certain sectors, as power grid equipment like transformers receives a temporary tariff cap of 15%, and products with less than 15% metal content are now exempt.

Conversely, products with high metal content, such as some home appliances and machinery, may face higher costs as tariffs of up to 25% will apply to their entire value.

The United States has fundamentally changed its rules for taxing imported metal products under the Section 232 trade law.

Section 232: A provision of the U.S. Trade Expansion Act of 1962 that allows the President to impose tariffs on imports if they are determined to threaten national security.
Entered Customs Value: The total value of an imported good as declared to customs authorities. It typically includes the cost of the product, freight, and insurance.
HTS Code (Harmonized Tariff Schedule Code): An internationally standardized system of names and numbers to classify traded products. Customs authorities use HTS codes to determine tariff rates.