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What Does “Steel Content” Mean? A New CIT Case Puts CBP’s Section 232 Valuation Under the Microscope
Presidential Proclamation 10896 (Feb. 10, 2025) expanded Section 232 tariffs on steel products to a wider range downstream derivative products made wholly or partially of steel. The Proclamation stated that only the “steel content” of the products would be subject to tariffs. Neither the Proclamation nor CBP’s public guidance explains how “steel content” should be valued.
Imagine importing a table with steel legs and a wood top. The steel legs are clearly steel content for 232 purposes, and the wood top is clearly non-steel content. However, what about the labor, overhead and profit? Should the importer apportion the labor, overhead and profit between the steel legs and the wood top, or should they exclude labor, overhead and profit entirely as non-steel content?
CBP resolved the ambiguity internally, at least for products made wholly of steel. In December 2025, CBP’s Base Metals Center of Excellence and Expertise circulated internal guidance instructing import specialists that when a product is wholly of steel, Section 232 duties apply to the entire entered value of the product. Under this approach, importers may not deduct the cost of processing, labor, overhead, or profit when valuing steel content. In practical terms, CBP treated all value in a wholly steel product as steel content.
Express Fasteners, an importer of steel fasteners, is challenging that interpretation at the Court of International Trade. Express Fasteners, Ltd. v. United States (Ct. Int’l Trade No. 26 00853). According to the Complaint, the company argues that CBP’s reading of “steel content” contradicts the ordinary meaning of the term. Express also alleges that CBP implemented its valuation rule through internal guidance rather than through formal rulemaking or published interpretive procedures, which violated CBP’s obligations under the Administrative Procedures Act.
The outcome of Express Fasteners could affect far more than one importer. The difference between material-value duties and full-value duties at Section 232 rates as high as 200% is enormous. At its core, the case asks a simple question with large financial consequences: does “steel content” mean the steel in the product, or the product itself whenever it happens to be made of steel?
The court’s answer may shape how Section 232 tariffs are applied to downstream products going forward. This question has taken on added urgency as the Administration has signaled a desire to expand Section 232 tariffs to new sectors, including semiconductors and critical minerals, following the recent Supreme Court decision holding that the assessment of IEEPA tariffs is unlawful.
Courtesy of Meeks, Sheppard, Leo & Pillsbury LLP