Steel, aluminum makers face records gauntlet for new US tariff breaks

An article from Steel, aluminum makers face records gauntlet for new US tariff exemptions Canada and Mexico manufacturers must commit to verifiable U. S. capacity expansion and maintain meticulous, traceable records to qualify for reduced Section 232 tariffs.

Published June 23, 2026 Antone Gonsalves Reporter Share Copy link Email / Print License Add us on Google The Herbert C. Hoover Building in Washington, D. C. , is the headquarters for the U. S. Department of Commerce.

The agency is offering to lower the tariff on steel and aluminum from Canada and Mexico from 50% to 25% if manufacturers based in the countries build or expand U. S. facilities. Getty Images Listen to the article 4 min This audio is auto-generated. Please let us know if you have feedback.

Steel and aluminum producers seeking to qualify for reduced Section 232 tariffs must navigate an intensive record-keeping process to demonstrate ongoing compliance, trade lawyers said. Last month, the Commerce Department introduced a process for Canada and Mexico steel and aluminum makers that feed the U. S.

auto and truck industry's supply chain to cut the current 50% tariff in half. Qualifying for the 25% rate requires producers to commit to building or expanding their primary metal production in the U. S.

Metal producers have to commit to specific capacity‑expansion projects and submit extensive certified documentation on those projects, according to a Federal Register document. They must then meet milestones set and monitored by the Commerce Department and provide regular, detailed reports showing how shipments tie back to the approved projects.

If the Commerce Department determines the supplier has fallen short of the requirements, the agency can revoke the reduced tariff and require full payment. Hence, ongoing documentation and traceability are critical to proving continued compliance, trade lawyers told Supply Chain Dive.

Meticulous record-keeping is essential because the program is in its early stages and still needs to be fleshed out, Daniel Pickard, international trade and national security practice lead at Buchanan Ingersoll & Rooney, said.

"There's obviously going to be a significant amount of discretion at the Department of Commerce in regard to the implementation of this," Pickard said. Qualifying facilities The Commerce Department does not define the types of facilities producers must build or expand to qualify for the tariff reduction.

However, eligible facilities could include mills, smelters, electric arc furnaces used to melt scrap steel or casting lines that shape molten metal into semi-finished products, according to Micah Burbanks-Ivey, an associate in Holland & Knight's public policy and regulation group.

"Suppliers should expect the government to evaluate milestones the same way lenders’ investment and project managers would evaluate whether a major industrial project is progressing."

Micah Burbanks-Ivey Associate in Holland & Knight’s public policy and regulation group Companies can also use qualifying production in Canada and Mexico, Burbanks-Ivey said, noting those with integrated supply chains across the two countries and the U. S. have a strong opportunity to lower tariffs.

Once projects are chosen, producers must show they are financially, contractually and operationally committed to expanding production capacity in a verifiable, enforceable way, Burbanks-Ivey said. Binding commitments can include capital expenditure plans, executed construction or equipment contracts, and related financing agreements.

Proving ongoing compliance Another critical element is setting and meeting milestones — such as buying land, starting construction and installing equipment — that demonstrate progress in building U. S. steel and aluminum capacity, trade lawyers said.

"Suppliers should expect the government to evaluate milestones the same way lenders’ investment and project managers would evaluate whether a major industrial project is progressing," Burbanks-Ivey said.

Maintaining the reduced 25% tariff will require end-to-end tracing of steel and aluminum production, showing where metals are melted and poured or smelted and cast in North America, trade lawyers said.

"All your records have to be backed up by your actual accounting records — cost of goods, cost of your inventory, accounting journal entries," Robert Leo, a partner and customs lawyer at Meeks, Sheppard, Leo & Pillsbury, said. "All that has to be proper, so that customs can follow the trail, and then your own accountant can follow the trail."

A reputable customs broker experienced in steel and aluminum imports is also critical, Leo said. A competent broker will retain and transmit to customs the documents and data needed to file and support an entry. “If there are discrepancies, you need to know about it ahead of time, rather than after customs questions something.”

Robert Leo Partner and customs lawyer at Meeks, Sheppard, Leo & Pillsbury The b