Section 232 Mid-2026: Steel at 50%, Pharma Tariffs Hit July 31, and the New Aluminum Production Incentive
Section 232 tariffs have undergone their most significant transformation since the original steel and aluminum actions in 2018. In the first seven months of 2026 alone, the administration has raised rates to 50%, shifted tariffs to full product value instead of just metal content, expanded coverage to copper and pharmaceuticals, and created a new incentive program for domestic aluminum production. This guide covers every change importers need to understand — with the rates, the dates, and the action items.
Section 232 tariffs of 100% on patented pharmaceuticals take effect July 31, 2026 for 17 named major drug companies, and September 29, 2026 for all others. These tariffs are inclusive of Column 1 MFN duties — they do not stack on top of them.
Timeline of 2026 Section 232 Changes
Major Metals Overhaul (Proclamation 11021)
Steel and aluminum tariffs raised to 50%. Tariffs now apply to full customs value of all covered articles — not just metal content. Copper added under Section 232 at 50%. Products with less than 15% metal content removed from coverage.
Pharmaceutical Tariffs Announced
New Section 232 tariffs of 100% on patented pharmaceuticals and associated ingredients. Effective July 31 for 17 named companies, September 29 for all others.
Further Adjustments — Temporary Rates
New rate structures through December 31, 2027. Agricultural equipment and residential HVAC reduced to 15%. U.S.-origin metal threshold lowered from 95% to 85%. New derivative products added (lithographic plates, steel racks).
Aluminum Production Incentive Program
Companies investing in U.S. primary aluminum smelters can import primary aluminum at half the Section 232 rate. Department of Commerce administers approvals. Construction must begin by January 20, 2029.
Copper Smelt and Cast Reporting Mandatory
Importers of certain copper articles must report primary country of smelt and country of cast in ACE. Applies to HTSUS 8544.42.10, 8544.42.20, 8544.42.90, and 8544.49.10.
Pharma Tariffs Take Effect (Named Companies)
100% tariffs on patented pharmaceuticals begin for 17 named major drug companies including the largest global pharmaceutical manufacturers.
Current Section 232 Rate Structure — Metals
The April 2 proclamation restructured how Section 232 rates are applied. The key shift: tariffs now apply to the full customs value of the product, not just the declared value of the metal content within it. For derivative products — goods that contain steel, aluminum, or copper but are not primarily metal — this represents a significant cost increase.
| Category | Rate | What It Covers |
|---|---|---|
| Steel, aluminum, copper articles | 50% | Products made entirely or almost entirely of these metals — coils, sheet, rod, pipe |
| Substantially metal derivatives | 25% | Derivative articles substantially made of steel, aluminum, or copper — fittings, structural components |
| Metal-intensive equipment (transitional) | 15% | Transformers, switchgear, heavy machinery — through December 31, 2027 |
| Made with U.S.-origin metal | 10% | Products made abroad but entirely with U.S.-smelted/cast/poured metal (threshold: 85%+) |
| Low metal content (<15%) | Exempt | Products with less than 15% steel, aluminum, or copper are no longer covered |
| Russian aluminum | 200% | All Russian-origin aluminum articles and derivatives — unchanged since Proclamation 10522 |
| UK steel and aluminum | 25% | Reduced rate under the U.S.-UK Economic Prosperity Deal |
Products containing more than one covered metal (e.g., a product with both steel and copper) are subject to the applicable duty rate once, not stacked per metal. The highest applicable rate governs. Section 232 tariffs generally do not stack with the now-expired Section 122 surcharge, but they do stack with Section 301 tariffs on China.
Country-Specific Treatment
Not every country faces the full 50% rate. Trade deal partners receive preferential treatment, though the details vary by product and agreement.
| Country/Group | Treatment | Key Details |
|---|---|---|
| EU, Japan, Korea, Switzerland, Taiwan, Argentina, others | 15% cap (all-inclusive) | Effective rate capped at 15% total — does not stack on MFN rates at or above 15% |
| Canada & Mexico (USMCA) | Tariffs on non-U.S. content only | Duties apply only to non-U.S. content; minimum effective rate of 15%. U.S. content up to 40% at 0% |
| United Kingdom | 25% (steel/aluminum) | Under the U.S.-UK Economic Prosperity Deal. Lower than standard 50% |
| Russia | 200% (aluminum) | All aluminum articles and derivatives where any primary aluminum was smelted/cast in Russia |
| All other countries | 50% (standard) | Full rate on steel, aluminum, copper articles and most derivatives |
Section 232 Pharmaceutical Tariffs — New for 2026
In a historic expansion of Section 232 authority, the administration imposed 100% tariffs on patented pharmaceuticals and their associated ingredients. This is the first time Section 232 has been used to target the pharmaceutical supply chain, justified by national security concerns over U.S. dependence on foreign drug manufacturing.
Key Details
- Tariff rate: 100% on patented pharmaceuticals and associated ingredients
- These tariffs are inclusive of Column 1 MFN duties — they do not stack on top of them
- Effective July 31, 2026 for 17 named major drug companies (120 days from proclamation)
- Effective September 29, 2026 for all other pharmaceutical importers (180 days from proclamation)
- Applies specifically to "patented" pharmaceuticals — generic drugs are treated differently
- EU-origin generic pharmaceuticals are carved out effective September 1, 2026 under the EU trade deal
The Aluminum Production Incentive Program
On July 20, 2026, the administration created a new incentive designed to rebuild domestic aluminum smelting capacity. The United States currently has a significant gap between demand for primary aluminum and domestic production, particularly for defense applications — armored vehicles, naval vessels, spacecraft, and missiles all require high-strength aluminum alloys.
Companies that commit to building new U.S. aluminum smelters, expanding existing facilities, or refurbishing outdated ones can apply to the Department of Commerce for approval. Approved companies can import primary aluminum equal to their expected annual production at half the applicable Section 232 tariff rate.
Construction must begin by January 20, 2029. Commerce will monitor compliance and can withdraw benefits for missed commitments or fraud.
Copper Reporting Requirements — Effective July 30, 2026
Starting July 30, 2026, importers of certain copper articles must report the primary country of smelt and country of cast in ACE entry summaries. This requirement applies to four specific HTSUS classifications: 8544.42.10, 8544.42.20, 8544.42.90, and 8544.49.10. Where the smelt or cast country is unknown, importers may report "OTH" (other).
CBP has published five new error codes (869-873) for copper smelt and cast reporting. Importers should coordinate with their customs brokers to ensure ACE systems are updated to support the new Importer Additional Declaration Type Code 12.
The June 1 Adjustments — Temporary Relief Through 2027
The June 1 proclamation created a set of temporary rate structures effective June 8, 2026 through December 31, 2027. After that date, products revert to the standard rates established under the April 2 overhaul.
Key Changes in the June Proclamation
- Agricultural equipment reduced from 25% to 15% — combines, harvesters, and certain farm machinery
- Residential HVAC systems and components added at the 15% transitional rate
- Mobile industrial equipment (bulldozers, forklifts) eligible for 15% — but only from trade deal partner countries
- U.S.-origin metal threshold lowered from 95% to 85% — making it easier to qualify for the 10% reduced rate
- New products added to derivative coverage: aluminum lithographic plates and steel racks now subject to Section 232
- New Chapter 99 headings 9903.82.20 through 9903.82.26 with specific filing requirements
What Importers Should Do Now
- Audit your HTS codes against the current Annex structure. Products may have shifted between Annex I-A (50%), I-B (25%), and the new transitional categories (15%) since your last review.
- Recalculate duty exposure on full product value. If you were previously paying Section 232 only on the metal content value of a derivative product, your duty has increased significantly under the full-value methodology.
- Check if your products qualify for the 10% U.S.-origin rate. The threshold dropped from 95% to 85% U.S.-smelted/cast/poured content — products that previously missed the cutoff may now qualify.
- Review country-specific rates. EU and trade deal partner imports are capped at 15% all-inclusive. If your broker is applying the standard rate instead of the deal rate, you are overpaying.
- Prepare for copper smelt and cast reporting. Coordinate with suppliers to determine country of smelt and country of cast for covered copper articles before July 30.
- Pharmaceutical importers: prepare for July 31 / September 29 effective dates. Determine which products are "patented" under the proclamation's definition and model the 100% duty impact.
- Explore the aluminum incentive program. If your company is considering investment in U.S. aluminum production capacity, the half-rate import benefit could significantly improve project economics.
- Verify USMCA certification. Canada and Mexico-origin goods face tariffs only on non-U.S. content — valid USMCA certification is worth more than ever at a 50% base rate.
Calculate Your Section 232 Exposure
Our Import Duty Calculator includes the full 2026 duty stack — Section 232 at current rates, Section 301, MFN, MPF, and HMF. The Tariff Impact Simulator lets you model what your cost structure looks like under different sourcing scenarios.
🧮 Calculate My Duty Stack 📊 Model Sourcing ScenariosKey Dates to Watch
| Date | Event | Impact |
|---|---|---|
| Jul 31, 2026 | Pharma tariffs — 17 named companies | 100% tariff on patented pharmaceuticals from named manufacturers |
| Sep 1, 2026 | EU carve-outs take effect | Aircraft parts, cork, generic pharmaceuticals from EU go to MFN-only treatment |
| Sep 29, 2026 | Pharma tariffs — all others | 100% tariff extends to all pharmaceutical importers not named in the first tranche |
| Nov 2026 | U.S.-China tariff truce expires | If not renewed, rates on Chinese goods could increase significantly |
| Jan 1, 2028 | Transitional rates expire | Products at 15% transitional rate revert to standard Annex I-B rates (25%) |