The Department of Commerce’s Bureau of Industry and Security (BIS) has issued guidance to U.S. Customs and Border Protection (CBP) defining the U.S. content that importers may exclude when calculating certain Section 232 duties on qualifying products from Canada and Mexico.
The guidance, published in the Federal Register on October 14, 2026 (91 FR 65162), applies to covered goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time on October 14, 2026.
The change matters most for importers of steel and aluminum derivative products that would otherwise face the full 25% Section 232 rate and that qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA). Products already eligible for the reduced 15% rate, such as certain industrial machinery, agricultural equipment and residential HVAC products, may see little or no additional benefit, because the USMCA treatment cannot bring the effective duty below 15%.
How the USMCA Tariff Treatment Works
Under Presidential Proclamation 11032, signed June 1, 2026, qualifying products from Canada and Mexico may receive a special method for calculating Section 232 duties.
For covered products that qualify for USMCA preferential tariff treatment, the 25% Section 232 duty applies only to the product’s non-U.S. content. However, the total effective duty assessed on the imported product cannot be less than 15% ad valorem. Where more than one rate could apply, the proclamation provides that the lowest applicable rate governs.
The treatment is not available merely because a product was shipped from Canada or Mexico. The merchandise must qualify for preferential treatment under USMCA and must fall within the product provisions covered by the proclamation.
The reduced rates under the proclamation are scheduled to run through December 31, 2027. Beginning January 1, 2028, rates are set to revert to those established under the earlier Proclamation 11021 unless further action is taken.
What Counts as U.S. Content?
The proclamation defined non-U.S. content as the product’s total value minus the value attributable to parts produced in the United States, and directed Commerce to issue guidance on how CBP should assess U.S. content. The new BIS guidance defines U.S. content as:
- The value attributable to parts wholly obtained, entirely produced or substantially transformed in the United States.
- To the extent not already counted under the first category, the value attributable to steel melted and poured in the United States, aluminum smelted and cast in the United States, and/or copper smelted and cast in the United States.
The second category allows importers to count qualifying U.S. metal value contained in a part produced outside the United States. The “not already counted” language prevents the same value from being counted twice.
Non-U.S. content is the product’s total value minus its qualifying U.S. content.
BIS directs questions about how the guidance applies to a specific product to CBP. As of this writing, CBP has not issued separate entry filing instructions for the new definition, so importers should watch for CSMS guidance before changing their filing practices.
Documentation Will Be Critical
The guidance creates an opportunity to reduce Section 232 exposure, but importers must be able to support the amount of U.S. content claimed.
A certificate of origin or supplier statement identifying the finished product as Canadian or Mexican will not, by itself, establish the value of its U.S. content.
Importers should consider obtaining records that identify:
- Each U.S.-origin part included in the imported product
- The value assigned to those parts
- Where each part was produced or substantially transformed
- The producer and production location
- Steel melt-and-pour information
- Aluminum smelt-and-cast information
- Copper smelt-and-cast information
- The methodology used to prevent double counting
- The relationship between the supporting values and the product’s entered value
The importer should also document why the finished product qualifies for USMCA preferential treatment. That determination is separate from the calculation of U.S. content.
Misstatements Can Create Enforcement Exposure
Proclamation 11032 directs CBP to impose penalties, to the extent permitted by law, if the agency determines that an importer engaged in fraud or deliberately misled the government about a product’s U.S. content.
That language makes unsupported estimates particularly risky.
Importers should avoid relying on general supplier percentages that cannot be tied to identifiable components, production records or metal certifications. They should also confirm that their customs broker receives consistent instructions and the records necessary to support the entry declaration.
Because the calculation may involve procurement, engineering, customs and supplier data, companies should establish a documented internal review before claiming the reduced duty treatment.
Steps Importers Should Take Now
Companies importing covered products from Canada or Mexico should:
- Confirm that the finished product qualifies for USMCA preferential tariff treatment.
- Determine whether the product is covered by the Section 232 provisions addressed in the proclamation, and which rate would otherwise apply.
- Identify all potentially qualifying U.S.-produced parts.
- Obtain melt-and-pour or smelt-and-cast records for qualifying U.S. metals.
- Establish a consistent valuation methodology.
- Prevent the same U.S. value from being counted under more than one category.
- Calculate the duty on non-U.S. content and account for the 15% minimum effective duty.
- Retain the supporting records with the entry documentation.
- Provide clear written filing instructions to the customs broker, and monitor CBP for CSMS filing guidance.
- Periodically review the calculation when suppliers, components or prices change.
The new definition gives importers a clearer framework for claiming U.S. content, but the potential savings should be weighed against the documentation and enforcement risks associated with the claim.
For additional information, review BIS’s U.S.-content guidance and Presidential Proclamation 11032.
ASK Alba™: Contact the Alba team for assistance determining eligibility, documenting U.S. content, calculating Section 232 exposure or preparing customs filing instructions.
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References
- Bureau of Industry and Security, Guidance to U.S. Customs and Border Protection Regarding the Assessment of U.S. Content for Purposes of Clause (2)(d) of Proclamation 11032, 91 FR 65162, October 14, 2026 (Doc. 2026-20938)
- The White House, Proclamation 11032: Further Adjusting the Tariff Regimes for Imports of Aluminum, Steel, and Copper Into the United States, 91 FR 34085, June 4, 2026 (Doc. 2026-11314)
