Tax Insights: US tariffs on steel, aluminum and copper imports from Canada (June 2026 update)

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Issue 2026-24

In brief

What happened?

On June 1, 2026, US President Donald Trump signed a proclamation¹ under section 232 of the US Trade Expansion Act of 1962 that further modifies tariffs on steel, aluminum and copper imports into the United States. Key changes made by the proclamation that are effective June 8, 2026:

• temporarily reduce tariff rates from 25% to 15% on agricultural equipment and certain residential HVAC systems and components
• create a new tariff category (Annex I‑C of the proclamation) for mobile industrial equipment and machinery, which has a variable tariff rate structure that depends on country of origin — for qualifying goods under the Canada‑United States‑Mexico Agreement (CUSMA), a 25% tariff applies only to the non‑US content of the product, subject to a minimum tariff of 15% of the total product value
• permanently reduce, for products manufactured abroad, the US-origin steel, aluminum and copper content threshold from 95% to 85% by weight — products exceeding this threshold qualify for a reduced 10% tariff rate
• provide a reduced tariff rate for certain parts listed in Annex I‑B of the proclamation when imported exclusively for use in manufacturing equipment in Annex I‑C, and agricultural or fixed industrial equipment in Annex III of the proclamation

These changes build on prior proclamations, including the April 2, 2026 proclamation,² which had established a revised tariff structure for steel, aluminum and copper imports into the United States and discussed in our April 22, 2026 Tax Insights “US tariffs on steel, aluminum and copper imports from Canada.”

Why is it relevant?

The June 1, 2026 proclamation provides some relief to Canadian manufacturers of agricultural equipment, construction‑related machinery and equipment and certain HVAC systems and components that are exported to the United States. Canadian exporters of mobile industrial equipment and machinery that qualifies under CUSMA could also benefit, because the 25% tariff will only apply to a product’s non-US content, subject to the minimum 15% tariff rate that applies to the total value of the product. 

Actions to consider

Canadian exporters of goods to the United States that are subject to both the aluminum, steel and/or copper tariffs and other tariffs imposed under section 232 should continue to carefully consider the "stacking" order of operations and determine the optimal application of these tariffs on each of their goods to minimize the amount of tariffs on each good imported into the United States. This includes considering whether it remains beneficial to continue relying on the CUSMA to be exempt from some of these tariffs.

In detail

June 1, 2026 proclamation

Effective June 8, 2026, the June 1, 2026 proclamation:

• temporarily reduces tariff rates from 25% to 15% (until December 31, 2027) on the following categories of aluminum and steel derivative products:
  • agricultural equipment, including combines, harvesters, tractors for agricultural use, plows and related parts
  • certain residential HVAC systems and components, including air conditioning evaporator coils and related parts
• creates a new tariff category (Annex I‑C) for mobile industrial equipment and machinery, including bulldozers, forklifts, graders, scrapers, mobile cranes, non‑agricultural tractors and related parts — until December 31, 2027, Annex I‑C is subject to a variable tariff rate structure that depends on the country of origin — for products:
  • from countries without a trade deal — the default tariff rate is 25%
  • from trade deal countries (Argentina, Ecuador, El Salvador, Guatemala, Japan, the Republic of Korea, Liechtenstein, Switzerland, Taiwan, the United Kingdom and European Union member nations) — the section 232 tariff is set so that the combined rate (Column 1 Harmonized Tariff Schedule of the United States [HTSUS] rate plus section 232 tariff) equals at least 15%; if the Column 1 rate already equals or exceeds 15%, no additional section 232 tariff is imposed
  • whose aluminum content, or whose steel content, was entirely smelted and cast in the United States — the section 232 tariff is set so that the combined rate (Column 1 HTSUS rate plus section 232 tariff) equals at least 10%; if the Column 1 rate already equals or exceeds 10%, no additional section 232 tariff is imposed
  • from Canada and Mexico that qualify under CUSMA, a 25% tariff applies only to the non-US content of the product (total value minus value attributable to US‑produced parts), subject to a minimum effective tariff of 15% on the total product value

When multiple rates apply to a product, the lowest applicable tariff rate will apply.

• expands the list of derivative metal products — subject to a 25% tariff rate — to include aluminum lithographic plates and steel racks
• permanently reduces the US-origin steel, aluminum and copper content threshold from 95% to 85% by weight, so that metal products manufactured abroad using at least 85% US-origin metal (i.e. smelted/cast or melted/poured in the United States) will qualify for the reduced 10% tariff rate
• provides a reduced tariff rate for parts classified in Chapters 84, 85 or 87 of the HTSUS and listed in Annex I‑B, when imported exclusively for use in manufacturing:
  • mobile industrial equipment (Annex I-C)
  • agricultural equipment or fixed industrial equipment (Annex III)

However, this treatment does not apply to products from countries listed in the HTSUS general note 3(b).

Updated tariff structure for steel, aluminum and copper

The tariff structure, which reflects both the April 2, 2026 and June 1, 2026 proclamations, is as follows:³

Next steps for businesses

Companies should consider and plan for the following:

• Customs tariff base expansion – The full‑value tariff calculation that was introduced in the April 2, 2026 proclamation increases the landed cost of imported goods and consequently the base on which other import-related charges (e.g. merchandise processing fees) may be computed. Importers should review transfer pricing methodologies for intercompany transactions involving covered goods to ensure customs valuations align with arm's-length standards.
• Country-of-origin planning – For products in Annex I-C of the proclamation, the differentiated country treatments and the CUSMA non‑US‑content formula will create potential planning opportunities — and compliance risks — around rules of origin, metal sourcing and supply chain routing.
• Temporary nature of reductions – The rate reductions in the June 1, 2026 proclamation are temporary (they end on December 31, 2027). Businesses should take into account the higher tariff rates that will apply January 1, 2028 when planning for their medium-term procurement contracts and capital expenditures.
• Stacking with other US tariffs – These section 232 tariffs may apply in addition to other tariffs and anti-dumping/countervailing duties, which could compound effective tariff rates for certain products. Accordingly, the "stacking" order of operations remains an important consideration for Canadian exporters, and Canadian businesses should carefully evaluate the interaction of these steel, aluminum and copper tariffs with CUSMA. However, note that section 232-covered products are exempt from the broadly applicable section 122 import surcharge,⁴ which is currently set at 10%.
• Fraud and penalty exposure – The June 1, 2026 proclamation specifically authorizes US Customs and Border Protection to impose penalties when importers engage in fraud or deliberate misrepresentation relating to US content claims — this reinforces the need for businesses to have robust origin documentation and compliance controls.

The takeaway

Canadian companies that export steel, aluminum or copper products — or goods containing these metals — to the United States should evaluate how the updated tariff structure affects their business operations, pricing strategies, supply chains and compliance requirements.

This updated section 232 tariff regime affects multiple industries, because it includes derivative products and extends tariff exposure beyond primary metals into sectors such as manufacturing, construction, automotive and consumer goods. For multinational corporations, this could create ripple effects on customs valuation, transfer pricing, supply chain structuring and overall effective tax rates.

It is important to stay informed of ongoing developments, including any potential government support programs that could help your affected industry, and to participate in industry advocacy initiatives. Visit our Tariffs and Trade Policy Resource Centre for information to help your business evaluate and navigate these tariff changes.