US Section 232 tariffs — the real landed cost

Section 232 is a US tariff justified on national-security grounds and applied to aluminum and steel articles. For buyers sourcing metal parts from China, it is the line item that turns a great factory quote into a losing project — usually because nobody added it up until the container was already at the port. This is a guide to modelling it. It is not a customs ruling, and it is not advice on how to avoid duty.

Where the rate actually stands

The Section 232 rate on aluminum has moved over time — it began at 10% and was later raised. Confirm the current rate at the time you quote; treating last year's number as fixed is how budgets blow up. Steel carries its own Section 232 treatment, and the two are assessed on the metal content of the finished part.

The landed-cost model (do this before quoting)

Don't stop at EXW. The real cost your customer cares about is delivered cost. Build it layer by layer:

• EXW factory price — what the shop charges.
• Domestic China freight + export handling — to port, documentation.
• International freight — ocean or air to the destination port.
• Section 232 duty — on the aluminum/steel content, at the current rate.
• MPF / HMF and brokerage — Merchandise Processing Fee, Harbor Maintenance Fee, broker.
• Last-mile freight — port to your door.

The gap between EXW and delivered is often 30–60% on a metal part. A buyer who only compared EXW quotes is comparing the wrong number.

Where 232 actually bites

• Aluminum extrusions — structural profiles, heatsinks, frames.
• Die-cast aluminum — housings, brackets, enclosures.
• Steel stampings and machined steel — at the steel rate.
• Parts with high metal content — the duty scales with how much tariffable metal is in the unit.

What legitimately affects the rate — and what does not

A few things genuinely influence what duty is owed: the metal content of the part, the material and process selected for sound engineering reasons, the Incoterms, and how the goods are entered. Whether duty is recoverable on re-export (drawback) is a real question worth asking a broker, and the value genuinely added in a given country is a fact, not a claim.

What none of this is, is a shortcut. A structure that exists only to change a classification without changing the goods is not something I will help build — it is also the kind of thing that becomes a far bigger problem than the duty it tried to dodge. Get the classification right, and let the duty be what it is.

The pattern I see

Buyers get a low EXW number, celebrate, then discover at clearance that Section 232 plus freight plus fees exceeds the saving. The fix is to model landed cost before the order, not after. That's the difference between a quote you can stand behind and one that quietly loses money.

Where I fit in

I model the full landed cost on your actual part — metal content, process, Incoterms — and flag the Section 232 exposure up front, so the number you give your customer is the number you land at. On the entry and classification side, your importer and broker make the call; my job is to give them the material and process facts, accurately. See how the engagement runs end to end:

See the sourcing process →

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