Trade & Customs Oct 16, 2026 · 8 min read

Commerce defines “U.S. content” for USMCA steel and aluminum

Commerce has defined “U.S. content”. The 15% floor still sets the bill. From 14 October, Canadian and Mexican steel and aluminum goods have a federal definition of “U.S. content”. The 25% Section 232 duty applies only to the part that isn’t U.S. content. In our view, the paperwork gets heavier but the savings don’t grow. For steel derivatives, CBP caps the U.S. content you can report at 40% of value, and 25% on the other 60% comes to 15%. That is exactly the legal floor. Brokers will need melt-and-pour and smelt-and-cast records from suppliers. Our call: CBP will issue new filing guidance that uses this definition before the end of Q4.

Washington has defined “U.S. content” for USMCA metal, and the 40% cap still sets the bill
On 14 October 2026, the Commerce Department’s Bureau of Industry and Security (BIS) published a short notice in the Federal Register (FR Doc. 2026-20938). It tells U.S. Customs and Border Protection (CBP) what counts as “U.S. content” in Canadian and Mexican steel, aluminum and copper goods that qualify for USMCA, the U.S.-Mexico-Canada trade agreement. The rule applies to goods “entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time on October 14, 2026.”
Our view: the notice is useful, but it does less than it looks. It settles what importers may count. It does not change how much they may claim, and that limit is what decides the duty. For most North American metal goods, the best possible result was a 15% duty before this notice, and it still is. What changes is the proof a broker needs to back up that 15%.

What the notice says

The rule sits inside Proclamation 11032, signed on 1 June 2026. That proclamation changed the Section 232 tariffs, the national-security duties on steel, aluminum and copper imports. Its clause (2)(d) gives USMCA goods a special deal: “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 then adds a floor: “the total effective duty on the imported product assessed under this subclause shall not be less than 15 percent ad valorem.” Ad valorem means a percentage of the goods’ value. The deal runs for entries from 8 June 2026 to 31 December 2027.
The proclamation itself defined only non-U.S. content, and loosely: “the total value of the product minus the value attributable to parts produced in the United States.” The new BIS notice replaces that with two tests. First, “the value of the product attributable to parts wholly obtained, entirely produced, or substantially transformed in the United States”. Second, “to the extent not otherwise accounted for in (1)”, the value of steel “melted and poured in the United States,” aluminum “smelted and cast in the United States,” and copper “smelted and cast in the United States.”
The second test is the new part. Take a Mexican bracket stamped from coil that was melted and poured in Ohio. Under a narrow reading of “parts produced in the United States”, that steel might not count. Under the new notice, it clearly does. “Substantially transformed” is the customs test for whether processing has turned something into a new product with a new origin.
The notice sets no filing or pre-approval procedure. It says: “Questions regarding the application of this Notice to a specific product may be directed to U.S. Customs and Border Protection.” It was signed by Jessica Curyto, BIS Deputy Assistant Secretary for Technology Security. MLex reported the guidance on 9 October, the day the notice was filed for public inspection.

Why the 40% cap matters more than the definition

The filing rules come from CBP, not BIS, and they have not changed. CBP’s message of 5 June (CSMS #68855869) splits a steel derivative onto two tariff lines. HTS 9903.82.20 “applies to the non-U.S. content of derivative steel articles and to U.S. content that exceeds 40 percent” at a 25% additional rate. HTS 9903.82.21 covers the U.S. content at 0%. The key sentence: “Do not report more than 40 percent of the value of the U.S. content of the good in heading 9903.82.21.”
Now do the arithmetic. If 40% of the value goes on the 0% line, the other 60% goes on the 25% line. Then 25% of 60% is 15% of total value, which is exactly the floor in the proclamation. The cap and the floor land on the same number. However much U.S. content a product really has above 40%, the duty stops falling at 15%.
Aurelia Gastelum, writing on the Joffroy blog, made the point in June: “A product that is 70 percent American pays the full Section 232 rate on roughly half its declared value.” In our own arithmetic, the 30 points of U.S. content above the cap plus the 30% foreign content make up 60% of value, all charged at 25%.
So the wider definition only helps goods whose U.S. content, counted the narrow way, came in under 40%. For those goods, adding U.S.-melted steel or U.S.-smelted aluminum can raise the share toward the cap. Every extra 10 points of credited value cuts the duty by 2.5 points. Above 40%, the new definition saves nothing.
There is a second gap. CBP’s June message defines U.S. content as “the value of the article attributable to parts produced in the United States”. That is the old, narrow wording. The BIS notice is wider. Jennifer Diaz, writing on the Customs & International Trade Law Blog on 15 October, notes that the notice does not change CBP’s instructions. For now, brokers are filing under a CBP message that describes U.S. content one way, while a Commerce notice describes it another way.

What brokers and forwarders should do now

The notice makes the claim easier to define and easier to audit. Expect both.
Records first. Diaz advises mapping the bill of materials to both tests: each part counted under the first must be wholly obtained, entirely produced or substantially transformed in the United States. For the metal itself, she recommends mill certificates and supplier declarations showing where it was melted and poured, or smelted and cast. The same value must not be counted under both tests. Where suppliers do not already provide melt-country data, brokers should ask for it before the next shipment, not after a CBP request for information.
Penalties second. The proclamation says that if CBP finds 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.” Diaz points out that general customs penalty law, 19 U.S.C. 1592, also covers negligence, not just fraud. A sloppy claim is still a risk.
Back entries third. Entries made from 8 June to 13 October fall outside the notice. Diaz suggests checking them against the proclamation and the CSMS. Where a claim was wrong, a post-summary correction (an amendment to an entry before it is finalised) or a prior disclosure (self-reporting an error to reduce penalties) may be needed. Some importers may also find they under-claimed U.S.-melted steel and overpaid.
For forwarders quoting landed cost on cross-border truck freight from Mexico or Canada, the planning number for qualifying derivatives is 15% at best and 25% at worst. Treat 15% as a ceiling on savings that only good paperwork can reach.

The bigger picture: talks with Canada and Mexico are stuck

The notice arrives while the wider trade talks have stalled. The International Compliance Professionals Association (ICPA), in a tracker updated on 11 October, says U.S. Section 232 tariffs on Canadian and Mexican steel and aluminum are “currently 50% on covered metal products”. It adds: “No USMCA text change to steel or aluminum trade has been identified as legally effective as of October 11, 2026.” ICPA also reports that Canada’s counter-tariffs on U.S. steel and aluminum rose to 50% from 8 September. It notes that joint review comments to the U.S. Trade Representative are due on 12 January 2027.
Mexico has asked for relief on the main 50% rate. Mexico Business News reported on 30 July that Economy Minister Marcelo Ebrard wants Washington to cut Section 232 steel tariffs from 50% to the 10% applied to UK steel. He argues that Mexico buys more U.S. steel than any other country. The same report says Mexican steel exports to the U.S. fell 36.6% in 2025. ICPA reports that, as of 11 October, no date had been set for the fourth U.S.-Mexico bilateral round.
Seen against that, the U.S.-content rule is a technical fix and not a concession. It makes a regime that already existed work more cleanly, and it rewards supply chains that buy U.S. metal. That fits the administration’s aim. ICPA cites U.S. Trade Representative Jamieson Greer as saying the administration is “not inclined to go to zero tariffs.”

Our prediction

We expect three things.
First, CBP will update CSMS #68855869, or issue a new message, so its wording matches the BIS two-part definition. We expect this before the end of Q4 2026. Two agencies cannot keep describing the same claim in different words for long.
Second, the 40% cap and the 15% floor will stay in place at least until the 12 January 2027 comment deadline. Any change to the USMCA metal rates will come through the joint review or a bilateral deal, not through more guidance notes.
Third, CBP requests for information on U.S.-content claims will become routine in the first half of 2027. Importers who claim the full 40% without melt-and-pour records will be the first to get them.

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