Trade & Customs Oct 13, 2026 · 7 min read

Commerce defines “U.S. content” for USMCA metal goods from 14 October

From Wednesday, US-melted steel cuts the tariff bill on Mexican and Canadian machines. The US Commerce Department publishes its definition of “U.S. content” on Wednesday, 14 October. It decides how much of a Canadian or Mexican metal product escapes a 25% Section 232 duty. That is 128 days after the duty started on 8 June. In our view, the rule matters less than the paperwork. Value now counts if the steel was “melted and poured in the United States” (Federal Register). The proclamation sets a 15% floor, so in our arithmetic US content above 40% saves nothing more. Our call: CBP requests for mill proof on these entries will be routine by end of Q1 2027.

Washington finally says what “U.S. content” means. The deduction now lives or dies on mill paperwork

From 12:01 a.m. Eastern Time on Wednesday 14 October, US Customs and Border Protection (CBP) will have a working definition of “U.S. content” for Canadian and Mexican metal goods. The definition comes in a two-page notice from the Commerce Department’s Bureau of Industry and Security (BIS). It went on public inspection at the Federal Register at 8:45 a.m. on 9 October and is scheduled for publication on 14 October.

It arrives 128 days after the tariff it serves took effect on 8 June.

Our view is simple. The notice is a real win for North American manufacturers that buy US steel and aluminium. It also moves the cost of the tariff from the duty line to the paperwork. From 14 October, the deduction is worth exactly what an importer can document, and that documentation starts at a steel mill, not a factory gate.

What changed on 1 June

The background is a 1 June proclamation, “Further Adjusting the Tariff Regimes for Imports of Aluminum, Steel, and Copper into the United States.” It amended the Section 232 metals tariffs. (Section 232 is the national-security law the US uses to put duties on steel, aluminium and copper.)

The proclamation itself notes that in April, through Proclamation 11021, the President “imposed an ad valorem duty of 50 percent on products made of those metals.” (Ad valorem means a percentage of the goods’ value.)

The June text then set a temporary 25% rate for aluminium and steel articles listed in its Annex I-C. Taft, a law firm, describes Annex I-C as covering mobile industrial equipment. Trade law firm ST&R gives bulldozers and forklifts as examples of the equipment involved. The proclamation says the Commerce Secretary recommended the change “to support the American businesses and factories that use these products.” ST&R reported: “These changes will be effective June 8, 2026, through Dec. 31, 2027.”

For Canada and Mexico, there was a special clause. The proclamation reads: “For products of Canada and Mexico that qualify for preferential tariff treatment under the United States–Mexico–Canada Agreement, a duty of 25 percent shall apply only to the non-U.S. content of the product.”

It defined non-U.S. content narrowly. It “means the total value of the product minus the value attributable to parts produced in the United States.” And it set a floor: the total effective duty “shall not be less than 15 percent ad valorem.”

The proclamation told the Commerce Secretary to issue guidance to CBP on how to assess US content. It set no deadline. That guidance is what lands on 14 October.

What the new notice says

The BIS notice splits US content into two parts.

The first is the value of parts “wholly obtained, entirely produced, or substantially transformed in the United States.” Substantial transformation is a customs term. It means a part was changed in the US into something with a new name, character or use.

The second part is new. To the extent it isn’t already counted, US content also includes the value of “steel that was melted and poured in the United States” and “aluminum that was smelted and cast in the United States.” The notice applies the same smelted-and-cast test to copper.

The notice applies to goods entered, or withdrawn from a bonded warehouse, for consumption on or after 12:01 a.m. Eastern Time on the publication date. It was signed by Jessica Curyto, Deputy Assistant Secretary for Technology Security.

That second part is the one that matters. Under the June wording, only US-made parts came off the dutiable value. Under the new notice, a frame welded in Monterrey from steel poured in Indiana can also count. In our reading, that widens the deduction a lot for Mexican and Canadian builders that buy US-origin coil, plate or extrusions.

The 40% ceiling

This point is our own arithmetic on the proclamation’s numbers.

The 25% duty applies to the non-US share. The total can’t fall below 15%. So savings stop once US content reaches 40% of the product’s value.

Take a $100,000 Mexican forklift. With $20,000 of US content, the duty is 25% of $80,000, or $20,000. That is a 20% effective rate. With $40,000 of US content, the duty is 25% of $60,000, or $15,000. That is exactly the 15% floor. With $60,000 of US content, the formula gives $10,000, but the floor lifts the bill back to $15,000.

This example assumes the 25% is the only duty in play. The proclamation’s Annex IV sets out how the floor is applied in detail.

The point is practical. For a product already near 40% US content, the new melt-and-pour rule changes little. For products in the 10% to 35% band, where US steel was in the product but not in a US-made part, the gain can be several percentage points of customs value. Those are the entries worth reworking.

Why the paperwork is the real story

The proclamation is blunt about cheating. “If CBP determines that an importer has engaged in fraud or has deliberately misled the United States Government regarding the United States content of an imported product, CBP shall impose penalties to the extent permitted by law.”

So the burden sits with the importer and, in practice, the customs broker filing the entry. Proving that steel was melted and poured in the US usually means mill test certificates. Those are documents from the steel mill that show where and how the metal was made. They then have to be traced through service centres, stamping shops and assembly plants in Mexico or Canada.

Most commercial invoices don’t carry that chain today. Many suppliers have never been asked for it.

The legal backdrop is shaky as well. On 1 July, at the first six-year joint review of USMCA, US Trade Representative Jamieson Greer said the United States “did not agree to renew the USMCA in its current form,” according to the International Institute for Sustainable Development. That triggered annual reviews. The agreement stays in force until 1 July 2036.

The ICPA’s USMCA tracker, updated on 11 October, reports: “No USMCA text change to steel or aluminum trade has been identified as legally effective as of October 11, 2026.”

The same tracker lists more friction. Proclamation 11065, published on 14 September, made Section 338 duties on Canadian goods apply on top of Section 232 duties, for entries from 15 September. Canada raised its surtax on listed US steel and aluminium from 25% to 50% from 8 September. The tracker reports that Mexico is seeking a cut in its steel rate to about 10%, but says no agreement has been announced.

In short, the US-content deduction is one of the few parts of this regime that rewards cross-border sourcing. It is also tied to a trade deal Washington has declined to renew as it stands.

What forwarders and shippers should do now

First, find the exposure. The clause only covers Annex I-C aluminium and steel articles that qualify for USMCA preference. Brokers should flag Canadian and Mexican entries under those tariff lines from 14 October.

Second, ask for mill data now. Shippers who want the deduction should get melt-and-pour and smelt-and-cast declarations from their metal suppliers before the goods move, not after a CBP query. The ICPA tracker gives the same advice: confirm the country of melt-and-pour for steel inputs and smelt-and-cast for aluminium inputs.

Third, check the timing. The notice applies to entries on or after 14 October. Nothing in it says it reaches back to entries made between 8 June and 13 October. Importers who declared US content in that window should check whether their numbers match the definition now in force.

Fourth, price the floor into quotes. For many products, the realistic landed-duty range is now 15% to 25% of value. Where the answer falls depends on documents, not on the product. Forwarders quoting landed cost should show both ends until the client’s paperwork is in hand.

Fifth, watch the clock. Under the proclamation, the Annex I-C rate runs to 31 December 2027. Joint-review comments to USTR are due by 12 January 2027, according to the ICPA tracker. Both dates could change what the deduction is worth.

Our call

We expect CBP to publish implementing instructions within two weeks. They will most likely come as a CSMS message (CBP’s Cargo Systems Messaging Service, the bulletin brokers use for filing changes) explaining how to report the US-content value on the entry.

We also expect requests for information to follow. By the end of Q1 2027, we think CBP Form 28 requests for melt-and-pour proof will be routine on Canadian and Mexican Annex I-C entries. (A CF-28 is CBP’s formal request for information about an entry.) Importers who cannot answer will be assessed on full value, subject to the 15% floor.

The forwarders who collect mill certificates now will have entries that stand up when those questions come.

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