From Steel to Spices: Why Derivative Tariffs Deserve Every Importer’s Attention

Section 232 tariffs were once seen as a fortress for U.S. metals. Yet, that fortress now casts a much longer shadow. Companies far removed from the steel and aluminum sector could soon find themselves ensnared in tariffs they never imagined, thanks to the inclusion process for “derivative” products.

Background

The Trump Administration has steadily expanded Section 232 authority well beyond their original steel and aluminum targets, to copper, automobiles, trucks, lumber, and even wooden cabinets. These tariffs, which range from 10% (for lumber) to 50% (for steel and aluminum), are layered on top of normal import duties.

At first glance, these measures appeared to strike only those industries handling raw materials. But in 2025 the Administration sought to close what it saw as a loophole: downstream products containing tariffed metals that could enter duty-free. As a result, section 232 tariffs were imposed on the raw material and a finite list of derivative products, enumerated in the executive orders. The Trump administration further expanded the list of derivative products subject to tariffs by creating a derivative inclusion process – a mechanism that can sweep in any finished good with trace metal content.

What is a Derivative Product?

A derivative product is merchandise that contains inputs or raw material subject to section 232 tariffs, even if that downstream product is classified as an entirely different product. For certain materials, such as copper, the list of derivative products is clearly defined and unchanging, as of yet. However, there are no apparent limits to the scope of products that can be considered a steel or aluminum derivative due to the inclusion process.

Peter Navarro, Senior Counselor to the President for Trade and Manufacturing, captured the principle bluntly: “There is no minimum content threshold—if the product contains covered steel or aluminum, the derivative duty can apply.”

For importers, that single sentence rewrote the playbook. In practice, this means that all importers, in all industries, need to assess whether their imports contain even the smallest quantity of steel or aluminum content.

The Inclusion Process

The list of steel and aluminum derivative products is not fixed; it is alive. Through the Bureau of Industry and Security (BIS), companies may petition to add new products to the tariff list. Once a petition is accepted, BIS reviews comments and must decide within 60 days whether to expand coverage.

The first inclusion requests, filed in May 2025, added 407 product categories to the steel and aluminum tariffs in August. The second round, now underway, is even broader, and less predictable. Not all section 232 regimes currently have an inclusion process, but new ones are arriving. In October 2025, the Administration introduced a parallel inclusion process for automotive parts, a move underscoring that derivative-style expansions are now becoming standard features across section 232 tariffs.

The takeaway: tariff exposure can change overnight, without a vote in Congress or even a headline in the paper. A single inclusion approval can transform a previously low-risk import into a high-tariff item.

From Steel Pipes to Spices:

The early inclusion process focused largely on familiar terrain – roughly 80 percent of inclusion requests were filed for steel and aluminum derivatives such as pipes, tubes, and metal structures under Harmonized Tariff Schedule (“HTS”) Chapters 72 through 89.  But in the second wave, the terrain has now shifted and that share of inclusion requests for traditional metal structures has dropped to only 56 percent. The remaining requests target products that no one would expect to be a national security risk for the steel and aluminum industries: coffee, tea, maté and spices; preparations of vegetables, fruit, nuts or other parts of plants; preparations of cereals, flour, starch or milk; and bakers’ wares, among others.

If BIS grants these requests, importers of everyday commodities could soon face duties as high as 50 percent by December, a striking illustration of how a national-security tool for metals has crept into the grocery aisle.

Now is the time to review the published requests, consider submitting public comments before the October 21 deadline, and prepare for potential impacts on your supply chains.

Policy and Strategy

The expansion of derivative tariffs is not merely a compliance concern; it is at the crossroads of trade policy and strategic opportunities.

BIS has approved the vast majority of inclusion petitions in the first wave, signaling a permissive approval standard. Early, coordinated engagement is therefore important. Businesses should not simply brace for what comes – they should shape it. Once products are added to the derivative list, removal is significantly more difficult than prevention.

Meanwhile, the Administration appears to be simultaneously considering limited exemptions under section 232 for products that cannot be produced domestically, such as certain foods, minerals, and metals, through a developing “Annex III” process.

Together, these actions represent both sides of the 232 coin: expansion and calibration. Both trends demand attention.

Congressional offices and trade groups need to hear from affected industries now, urging that derivative criteria remain tethered to genuine national-security interests and substantial metal content. Once a product lands on the derivative list, removal is far harder than inclusion. The window to shape future standards for inclusion is open, but it won’t stay open for long.

Practical Implications

For products designated as steel or aluminum derivatives, the 50 percent tariff applies only to the value of the steel or aluminum content – not on the full value of the finished good – provided that the metal content value can be substantiated and meets Customs requirements. Knowing whether the product is under inclusion review – and understanding its material composition – has become essential risk management.

Moreover, derivative status can trigger change for how other measures apply to an import, such as: reciprocal tariffs under IEEPA, Mexico and Canada’s fentanyl-related tariffs, Russian oil levies, and Brazil’s additional duties, among others.

To determine whether an inclusion request affects your products – or to submit a public comment – please contact:

Clark Hill’s international trade attorneys Mark Ludwikowski (mludwikowski@clarkhill.com; 202-640-6680), Kevin Williams (kwilliams@clarkhill.com; 312-985-5907), Kelsey Christensen (kchristensen@clarkhill.com; 202-640-6670), or CHPS policy analyst Kristina Aleksanyan (kaleksanyan@clarkhill.com; 202-640-6641).

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