WASHINGTON: President Trump signed a proclamation on April 2 overhauling how the United States calculates tariffs on imported steel, aluminum, and copper. The changes, which take effect at 12:01 a.m. EDT on April 6, 2026, expand Section 232 metals tariffs to cover finished products for the first time and apply duties to the full customs value of qualifying imports rather than just the metal component. The White House fact sheet describes the move as closing loopholes that allowed companies to dodge tariffs by importing finished goods instead of raw materials.
Why the Tariff Calculation Change Matters for Product Companies
The old system taxed only the metal portion of an import. A diesel engine made with $2,000 worth of steel paid tariffs on that $2,000. Under the new rules, that same engine pays 25% on its full entered customs value. If the engine is worth $15,000, the tariff jumps from roughly $500 to $3,750. That is the math that will reshape purchasing decisions for any company importing metal-heavy products.
The proclamation creates five tariff tiers. Raw metals, including steel coils, aluminum sheet, and copper ingots, now carry a flat 50% duty on their full value. Finished and semi-finished products substantially made of these metals pay 25%. Products manufactured abroad using only American-sourced steel, aluminum, or copper qualify for a reduced 10% rate. Metal-intensive industrial equipment and electrical grid components get a transitional 15% rate through the end of 2027 to avoid choking domestic infrastructure projects. And products containing 15% or less metal by weight are exempt entirely.
The scope is broad. Goods classified under HTS Chapters 72, 73, 74, and 76 are covered. That includes cooking appliances, silverware, diesel engines, semi-trailer trucks, industrial machinery, metal containers, and structural steel components. According to analysis by International Trade Insights, even metal containers filled with non-covered items now fall within the tariff’s reach. Nails, staples, steel bumpers, aluminum foil, and aluminum cable are also on the derivative products list.
What Do the New Section 232 Tariffs Mean for Startups Building Physical Products?
Any founder importing components, manufacturing hardware, or running a direct-to-consumer brand with metal packaging faces higher landed costs starting April 6. The 25% duty on the full value of finished goods is the biggest shift, because it taxes the entire product, not just the metal inside it.
Startups in consumer hardware, kitchen products, outdoor gear, and industrial equipment will feel this most. A company importing stainless steel cookware worth $50,000 per shipment now pays $12,500 in Section 232 duties alone, on top of any existing tariffs. That cost either compresses margins or gets passed to customers.
The American-sourcing incentive creates a real decision point. Products made abroad with domestic metals qualify for 10% instead of 25%. For founders already working with U.S. steel or aluminum suppliers, this could be a competitive advantage. For those who are not, the gap between 10% and 25% may justify renegotiating supply chains. The KPMG tax advisory on the proclamation notes that importers will need to document exact metal composition, origin certifications, and bills of materials to claim the reduced rate.
The 15% weight threshold also matters. If your product is mostly plastic, wood, or fabric with minimal metal hardware, it may now be exempt. Importers should calculate whether their products fall below that line and reclassify accordingly. For a product that previously paid duties because it contained any amount of covered metal, dropping below 15% by weight means zero Section 232 exposure. That creates an incentive to redesign packaging and components around the threshold.
What Comes Next
The April 6 effective date includes no grace period for goods already on the water. Shipments that arrive at U.S. ports after midnight on April 6 will be assessed at the new rates regardless of when they were loaded. Companies with metal-heavy imports in transit have days to prepare.
The White House fact sheet projects over 4 million tons of new crude steelmaking capacity coming online within two years across West Virginia, Arkansas, and South Carolina. That expansion is the administration’s bet that higher tariffs will pull manufacturing investment back to the United States.
The proclamation also gives the Secretary of Commerce and the U.S. Trade Representative joint authority to add derivative products to the covered list on a rolling basis, without fixed submission windows. That means the tariff’s reach could widen further in the coming months as more product categories get pulled in. The UK received a carve-out: 25% on primary metals and 15% on derivatives, lower than the standard rates for other trading partners.
For founders building physical products, the 2026 economic outlook already pointed to tariffs squeezing margins. This proclamation turns that forecast into a line item. The companies that move fastest to audit their supply chains, reclassify products where possible, and explore domestic sourcing will absorb the shock better than those that wait. The investment landscape for 2026 now includes tariff exposure as a factor every hardware founder needs to price in.
