Section 232 at 50%: A Landed-Cost Guide for Buyers Importing Steel Racks and Pallets

If you import steel racks, pallets or stillages into the United States, Section 232 tariffs can change your landed cost overnight. Since 4 June 2025 the duty on steel and many steel derivative articles has stood at 50%, and a series of 2025 proclamations widened the list of "derivative" products it covers. But the tariff does not automatically hit every steel rack, and where it does apply it is charged only on the steel content — not the whole invoice. This guide explains how the rule works, how to check whether your product is caught, and how to model the true landed cost before you order.

This is general information, not customs or legal advice. Tariff scope depends on your product's exact HTS code and country of origin, and rates change; always confirm the current classification and duty with a licensed US customs broker or with CBP before you rely on a figure.

Quick answer

US Section 232 duty on steel racks and covered steel derivatives is 50%, with a 25% carve-out for UK-origin goods. A rack, pallet or stillage is only in scope if its specific HTS code appears on the Section 232 derivative list, and the duty is assessed on the steel-content value, reported under a Chapter 99 HTS subheading alongside the normal classification. Chinese-origin goods may also carry a separate Section 301 duty on top. Model duty, freight and your Incoterm together to get the real landed cost.

How the 2025 Section 232 changes stack up

Section 232 of the Trade Expansion Act of 1962 lets the US adjust imports on national-security grounds. Three 2025 actions reshaped the steel picture:

The framework comes from the US Federal Register notice implementing Proclamation 10896; the increase to 50% is set out in the June 2025 White House fact sheet; and the August expansion is described by the Bureau of Industry and Security. The August batch carried no in-transit exemption, so goods already on the water were still affected.

Is your rack even in scope? Check the HTS code

This is the step buyers most often get wrong. Section 232 does not say "all steel products"; it applies to steel and to a defined list of derivative steel articles identified by HTS code. Finished racks, pallets and containers can classify under headings such as 7326 (other articles of iron or steel), 7308 (steel structures and parts of structures), 7310 (steel tanks, casks and containers) or 9403 (metal furniture) — but whether a given code sits on the derivative list, and therefore carries the 232 duty, has to be checked code by code.

Ask your customs broker to confirm the exact HTS classification of your rack and whether that code currently attracts a Chapter 99 Section 232 subheading. Do not assume every steel rack is caught, and do not assume yours is exempt — the answer is specific to your product and can change as the derivative list is amended.

The duty is on the steel content, not the whole value

For a derivative article, Section 232 is charged on the value of the steel content, not the entire customs value. The importer reports the regular HTS classification plus a Chapter 99 subheading for the 232 duty and declares the steel-content value. Where the steel content is not separately declared, CBP may apply the duty to the full value — so an accurate steel-content breakdown on your commercial invoice directly affects what you pay. A supplier who can state the steel weight and steel value per unit helps you and your broker report it correctly and avoid over-paying.

Chinese origin: Section 301 may stack on top

Section 232 is separate from the Section 301 duties that apply to many China-origin goods. For a rack made in China, both can apply to the same shipment — 232 on the steel content and 301 on the goods — so the combined rate can be materially higher than either alone. The exact Section 301 line rate depends on the HTS code and is subject to change, so confirm the current figure with your broker rather than working from an old number. Note too that the 50% 232 rate also lands on imported steel used by domestic fabricators and on competitors importing from other origins, so the real gap between sourcing options is often narrower than a headline rate suggests. That is exactly why a full landed-cost comparison beats comparing sticker prices.

Model your landed cost, step by step

1. Classify the product. Get the exact HTS code and country of origin, and have a customs broker confirm whether the code is on the Section 232 derivative list.
2. Split out the steel content. Ask the supplier for the steel weight and steel value per unit — Section 232 is charged on the steel-content value, not the full price.
3. Apply Section 232. 50% on the steel content (25% for UK origin), reported under the relevant Chapter 99 subheading.
4. Add Section 301 if applicable. For China origin, add the current Section 301 rate on the goods — confirm the live figure with your broker.
5. Add freight and your Incoterm. Ocean freight, insurance and inland haulage depend on whether you buy EXW, FOB, CIF or DDP.
6. Total and compare. Sum product + duties + freight + fees per unit, and compare origins on landed cost — not on the sticker price.

Common mistakes

• Assuming scope. Treating every steel rack as a 232 derivative — or assuming yours is exempt — without checking the HTS code.
• Duty on the wrong base. Applying 50% to the whole invoice instead of the steel-content value.
• Forgetting the stack. Overlooking that Section 301 can apply on top of 232 for Chinese-origin goods.
• Stale rates. Using an old Section 301 figure — the lines change; confirm the current rate.
• Sticker vs landed. Comparing ex-works prices across suppliers instead of full landed cost.
• Ignoring the Incoterm. Not checking who actually pays the duty and freight — EXW and DDP put that burden in very different places.

Key takeaways

• US Section 232 duty on steel and covered derivatives is 50% since 4 June 2025 (25% for UK origin).
• A rack is only in scope if its HTS code is on the derivative list — check code by code.
• The duty is charged on the steel-content value and reported under a Chapter 99 subheading.
• Chinese-origin goods can carry Section 301 on top of 232 — confirm the current rate.
• Compare sourcing options on landed cost, and let your Incoterm decide who pays what.

Get a steel-content breakdown for your quote

Accurate landed-cost planning starts with a clear steel-weight and steel-value breakdown per unit — something we provide with every quote. Send us your part and destination and our team will return a spec with the steel content itemised so you and your broker can classify and cost it correctly. Start on our customization page, see how shipping terms decide who pays the duty in our Incoterms guide for rack buyers, and review unit economics in the custom rack cost guide.