The U.S. Commerce Department opened a process on April 23, 2026, allowing certain steel and aluminum producers operating in Canada or Mexico to request lower Section 232 tariffs if they commit to adding primary metal production capacity in the United States.
Approved applicants can obtain a reduction in the applicable Section 232 tariff from 50% to 25% on qualifying imports. Relief requires Commerce approval and is subject to quantity limits, a fixed duration and continued compliance with investment commitments.
The procedures implement authority granted under Presidential Proclamation 10984 of October 17, 2025. Commerce’s notice covers metal producers supplying U.S. automobile or medium- and heavy-duty vehicle manufacturers, either directly or indirectly through parts.
Eligibility and import limits
Applicants must produce steel or aluminum in Canada or Mexico and identify the U.S. vehicle manufacturers they supply. Their proposed U.S. capacity must support production of automobiles, medium- and heavy-duty vehicles, or parts for those vehicles.
Eligible imports must also meet origin and trade-treatment requirements. Steel must be melted and poured in Canada or Mexico, while aluminum must be smelted and cast in Canada or Mexico. The imports must qualify for preferential tariff treatment under the U.S.-Mexico-Canada Agreement, or USMCA.
Commerce will limit the quantities receiving relief to the projected annual new U.S. production capacity it determines the project will provide. The department will establish quarterly import limits and a fixed period for the adjustment. In setting that period, it will consider the resources committed, national security benefits, the commercially reasonable time needed to complete the project and begin production, and other factors it considers appropriate.
Investment plans and milestones
Qualifying commitments must expand U.S. primary steel or primary aluminum production capacity. For this process, Commerce defines primary steel as steel produced in a U.S. basic oxygen furnace, electric arc furnace or another steelmaking furnace. Primary aluminum means aluminum produced in a U.S. smelter.
Submissions are considered project by project. Commerce calls for documentation certified by the applicant’s chief financial officer, general counsel or an equivalent senior officer. Companies must describe their existing Canadian or Mexican production locations, products and volumes, and identify the U.S. vehicle manufacturers they supply and the quantities supplied.
The proposed investment plan must identify the project’s location, objectives, progress to date and projected annual production capacity. Applicants must describe engagement with local authorities on permitting and incentives, equipment suppliers, construction contractors, raw material requirements and expected suppliers, and plans to increase hiring.
A project management plan must explain how the work will be managed and estimate construction, engineering, equipment and other significant costs.
Applicants must provide targets for seven mandatory milestones:
- Purchase of land
- Completion of facility design
- Hiring of the construction team or contractors
- Start of construction
- Purchase of equipment
- Delivery and installation of equipment
- Completion of construction and the first production heat
Companies may also submit milestones for permitting, financing agreements, significant construction or engineering contracts, hiring engineers and equipment certification. Approved applicants must provide quarterly reports covering progress against milestones and the project management plan, costs incurred and proposed milestone changes.
Approval and continued eligibility
Commerce will review submissions for completeness, commercial practicality and compliance with its procedures. Following approval, the department will notify U.S. Customs and Border Protection of the effective date, authorized importer and quarterly quantity eligible for the 25% Section 232 rate.
Commerce may pause relief if a company is not substantially meeting its milestones. Significant delays within the applicant’s control that threaten timely completion can lead to termination. Failure to provide requested information or access needed to verify compliance can also result in loss of eligibility.
If Commerce determines that a company has failed to substantially meet its investment commitment, earlier imports that received the adjustment must be assessed or reassessed at the otherwise applicable tariff rates.
A company that returns to substantial compliance with its milestones can regain relief with Commerce’s agreement. The notice also provides for retroactive relief on qualifying imports entered during the suspension period if Commerce accepts that compliance has been restored.
