Section 232 U.S. steel & aluminum tariffs: What exporters need to know

Canadian steel and aluminum exporters have faced escalating challenges as a result of trade measures introduced by the United States (U.S.) government.  

On March 12, 2025, the United States imposed 25% tariffs on Canadian steel and aluminum imports, under an executive order by U.S. President Donald Trump. The measure was taken under Section 232 of the Trade Expansion Act of 1962, which gives the president considerable policy discretion. 

On June 4, 2025, the U.S. administration doubled the steel and aluminum tariffs to 50%.

On April 2, 2026, the U.S. made major changes to the existing Section 232 tariffs on aluminum, steel and copper imports.  These changes defined how the tariffs are assessed, “ensuring that they reflect the full value of imported steel, aluminum, and copper products—not an artificially low foreign price,” according to the U.S. government.

Similar to the tariffs the first Trump administration placed on steel and aluminum from Canada and other countries in 2018, the new tariffs were introduced on national security grounds. However, Canadian companies may face greater challenges this time around. The measures announced in 2025 and expanded in 2026 are substantially wider in scope than those imposed by the first Trump administration.

The Government of Canada implemented reciprocal measures against U.S. steel, aluminum and other products to safeguard Canadian businesses and workers.  

Under the prior Section 232 framework, tariffs on many derivative products were assessed based only on the value of their steel and aluminum content. Their non-metal portion was not subject to Section 232 duties but could be subject to other applicable U.S. tariffs. 

The April 2, 2026 proclamation made significant changes to Section 232 tariffs, including:

• Duties are assessed on the product’s full customs value, rather than just the metal content.  
• A new tariff structure introduces tiered rates from 10% to 50%, based on product classification and origin.  
• Products containing less than 15% of the subject metals are granted a de minimis exemption from the Section 232 tariffs.   

A subsequent proclamation, issued on June 1, 2026, temporarily adjusted certain metal tariffs “to more effectively address national security threats, spur investment in American agriculture, housing, and manufacturing, and facilitate U.S. production of related products.” These adjusted rates are in effect until Dec. 31, 2027, according to the U.S. government. 

Applying tariffs to the full customs value of goods can have a significant impact on the tariff exposure of derivative products. The updated methodology may prompt companies to review product design, sourcing and import structures, as duties are assessed on the condition of the goods as imported.

The details of the Section 232 tariffs on metals can be complex, and they’ve changed frequently. Canadian companies exporting to the U.S. should check regularly with a customs broker or a trade lawyer to stay up to date on the latest developments and explore ways, in consultation with qualified advisors, to minimize risks and take advantage of opportunities for lower tariff rates.

The U.S. is, by far, Canada’s top export market for steel and aluminum. More than 40% of domestic steel and two-thirds of domestic aluminum output goes to the U.S.  Countless steel and aluminum derivative products cross the border every day. Key sectors, such as automotive, have been impacted. Canada is the top source of imported iron and aluminum for the U.S.

This high level of exposure means that tariff changes can quickly ripple into pricing, contract terms and diversification plans.

“These tariffs are having a significant impact on trade,” says David Weiner, regional vice-president for EDC in the U.S.

Across the sector, exporters report heightened uncertainty, tighter customer purchasing decisions, and more frequent requests for tariff-related documentation and landed-cost clarity.

Firms experiencing a slowdown in their business are conducting cost-optimization exercises while looking to EDC for help in areas such as managing cash flow. Many are also building new market plans and using risk-management tools to protect receivables.

Mike Brownhill, a commercial account director at EDC who covers advanced manufacturing with a focus on the automotive sector, says firms are devoting resources to tariff issues. This includes looking at HS classifications and codes while seeking workarounds and ways they might find tariff exemptions.  

“Companies are realizing the importance of consulting their customs brokers and are now noting the need to pay increased attention to how things are coded and billed, given that one subtlety in the tariff codes could have large impacts on fees payable,” he points out.

When tariffs and compliance requirements impact your business, taking a structured approach can help you manage risks and maintain resilience. Depending on your business model, product mix and customer relationships, here are some steps to consider:

• Maintain close communication with your customs broker and qualified trade counsel. As scope, valuation methodologies and documentation requirements evolve, even small classification or invoicing differences can significantly affect duty outcomes. You can reach out to a customs broker through the Canadian Society of Customs Brokers (CSCB), or your freight forwarder, for support. 
• Compare published lists of affected HS codes with your product classifications. Align with your U.S. importer and customs broker to determine how entries should be filed and what supporting documentation is required.
• Explore opportunities to diversify beyond the U.S. market. Reducing concentration risk can improve your resilience if demand shifts.
• If orders slow or payment terms stretch, assess your liquidity and non-payment risks. Consider risk management and working capital solutions, including EDC credit insurance.
• Review EDC’s Trade Impact Program to learn how we’re facilitating an additional $5 billion over two years in support for eligible companies across a range of products to help you navigate economic challenges.
• Stay informed through industry associations, such as the Canadian Steel Producers Association and the Aluminum Association of Canada. They can provide updates, advocacy context, and practical guidance on documentation expectations and market impacts.

Weiner predicts that volatility will be the order of the day for Canada’s exporters of steel, aluminum and derivatives. “You can’t take anything for granted; countries are going to be applying and retaliating against tariffs everywhere—all the time,” he says, adding that it’s important to be flexible and look for opportunities. “I think companies can adapt to any scenario, like it or not, but it needs to be predictable. The hardest thing in this current environment is that nothing’s predictable.”

In the face of this uncertainty, Weiner says that companies should continue investing in their business relationships to navigate what’s ahead.

“It takes time to build strong relationships with suppliers and customers. Canadian exporters need to take the long view and avoid putting those partnerships at risk over short-term challenges. Be transparent—communicate your immediate realities alongside your long-term goals,” Weiner says. “That openness builds trust. In the end, lasting relationships are grounded in consistent value, shared growth and mutual benefit. At the same time, working with EDC can help exporters navigate uncertainty and manage risk more effectively, so you can stay focused on sustaining those relationships.”

At EDC, we understand the complexities of international trade and are here to help you navigate these challenges. With our export knowledge, expertise in risk management and financial solutions backing you, you can focus on growing your business with confidence.

In response to rising global challenges, EDC launched the Trade Impact Program (TIP) in March 2025, committing up to $5 billion over two years through a broad range of solutions.  In its first year, TIP deployed $2.1 billion in support to approximately 800 Canadian companies facing tariffs, shifting global trade dynamics and ongoing market uncertainty.

On May 4, 2026, the Government of Canada announced $1.5 billion in new tariff support, including BDC’s Steel and Aluminum Industries Support Program for manufacturers and exporters that rely on steel, aluminum or copper. The government also pledged an additional $500 million to support tariff-impacted businesses in all sectors of our economy.

If you’re an eligible Canadian exporter, or a company that supplies exporters, here are additional ways EDC can help: 

• Export confidently: EDC trade credit insurance protects against losses in the event your foreign buyer doesn’t pay.
• Manage currency fluctuations: We offer solutions that mitigate the risks associated with foreign exchange fluctuations by stabilizing your costs and protecting your profit margins from adverse currency movements.
• Access more working capital: EDC guarantees share a portion of your financial institution’s risk, enabling you to access more financing for managing cash flow challenges and growing your operations.
• Enable global expansion: EDC’s financing solutions enable you to increase your capacity for trade, expand your footprint in different markets, or acquire a foreign company.

Be sure to check out EDC’s U.S. market intelligence hub for the latest information and insights to navigate Canada’s largest export market. EDC’s tariff-mitigation checklist for exporters outlines actions that Canadian companies can take to navigate uncertainties due to the tariffs.

To connect with an export advisor, register for our Export Help Hub.

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