Starting April 23, 2026, steel and aluminum producers operating in Canada or Mexico can submit documentation to the U.S. Department of Commerce to request tariff reductions of up to 50% on Section 232 duties—provided they commit to new U.S. production capacity. Submissions must be sent electronically to [email protected] under Docket No. 260420-0105 (RIN 0625-XC061).

The program stems from Proclamation 10984, signed October 17, 2025, which imposed additional tariffs on medium- and heavy-duty vehicles (MHDVs), MHDVPs, and buses while simultaneously authorizing the Secretary of Commerce to modify existing tariff obligations under Proclamations 9704 (aluminum, March 8, 2018) and 9705 (steel, March 8, 2018). The legal authority derives from Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. 1862), the same statute underpinning the original steel and aluminum tariffs.

Eligibility Requirements: Producers must operate facilities in Canada or Mexico, supply U.S. automobile or MHDV manufacturers, and demonstrate newly committed U.S. production capacity. The adjusted tariff rate cannot fall below 25%, and imports must qualify for preferential treatment under the USMCA with steel melted and poured—or aluminum smelted and cast—in Canada or Mexico.

For compliance engineering teams, the core challenge is mapping tariff rate adjustments to affected HTS codes. The tariff modifications apply only to specific quantities of aluminum or steel equal to the producer's newly committed U.S. capacity, as determined by Commerce. This means duty calculations may require producer-specific rate tables layered on top of standard Section 232 rates under HTS Chapter 72 (steel) and Chapter 76 (aluminum).

Systems pulling rates from Proclamations 9704 and 9705 must now account for a conditional reduction pathway. If your classification engine caches Section 232 rates without checking for producer-level adjustments, duty estimates for qualifying shipments will be overstated by as much as 12.5 percentage points—the maximum reduction available under this program.

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The International Trade Administration's notice specifies that the Secretary will review submitted documentation to substantiate new U.S. production capacity commitments before granting eligibility. No application deadline has been announced—submissions remain open indefinitely from the April 23, 2026 start date. For further information, Commerce directs inquiries to Emily Davis, Director for Public Affairs, at 202-482-3809 or [email protected].

Implementation Note: Producer-specific rate adjustments create a data dependency that most HTS APIs don't track natively. Trade compliance platforms will need to maintain a separate eligibility layer tied to Commerce determinations, not just proclamation-level tariff schedules.

The connection between MHDV supply chains and Section 232 metals tariffs reflects the administration's strategy of using tariff relief as an incentive for domestic capacity investment. For teams building duty calculation engines, this introduces a new variable: tariff rates on Canadian and Mexican steel/aluminum may now depend on the importer's production commitments rather than solely on product classification and country of origin.