US Proclamation 11032 — Further Adjusting Section 232 Tariff Regimes for Aluminum, Steel, and Copper

Mechanism

Proclamation 11032 is the fourth in the Trump administration's 2025-26 cycle of Section 232 modifications to the aluminum, steel, and copper tariff regimes, and the first to modify all three metals simultaneously. It operates through three distinct channels:

1. Agricultural equipment and residential HVAC carve-out (expanded 15% rate) Agricultural equipment and specified residential HVAC systems and components that had been subject to the blanket 25% derivative tariff (imposed via Proclamation 11021) are now eligible for the temporary 15% reduced ad valorem rate. This is a sector-specific reprieve for domestic downstream manufacturers whose input costs were raised by the April 2026 multi-metal consolidation proclamation. The 15% rate mirrors the structure used for USMCA-adjacent carve-outs in previous S232 proclamations.

2. New Annex I-C: mobile industrial equipment and machinery (calibrated 15%) The proclamation creates an entirely new annex establishing temporary S232 tariff rates for mobile industrial equipment and machinery. Specified countries receive calibrated 15% effective rates rather than the standard 25%, through December 31, 2027. This annex closes a gap in the April 2026 Proclamation 11021 architecture, which did not address this category explicitly.

3. New derivative products: aluminum lithographic plates and steel racks Aluminum lithographic plates and steel racks are formally designated as derivative products subject to S232 duties. This is an anti-circumvention measure — without derivative designation, importers could route finished products made from aluminum or steel through offshore conversion steps to avoid S232 exposure. Designation ensures the 25% or applicable rate applies to these finished forms.

Sunset clause: All temporary modifications introduced by Proclamation 11032 (the expanded 15% agricultural/HVAC rate, the Annex I-C machinery rates) expire December 31, 2027 and revert to Proclamation 11021 rates. The new derivative-product designations (lithographic plates, steel racks) are permanent.

Context within the S232 escalation cycle

Downstream implications

• Agricultural OEMs (Deere, AGCO, CNH Industrial) and HVAC manufacturers (Carrier, Trane, Lennox)

face lower input costs on aluminum/steel/copper derivatives used in equipment, partially reversing the April 2026 cost shock.

• Mobile industrial equipment manufacturers (Caterpillar, Manitowoc, Terex) benefit from

Annex I-C calibrated rates through 2027 — relevant for global procurement strategies.

• Printers and publishers using aluminum lithographic plates now face S232 duty exposure;

offshore plate manufacturing (principally Japan and Germany supply chains) is directly targeted by the derivative designation.

• Steel rack manufacturers (warehouse logistics, retail) face new derivative duties, affecting

domestic distributors sourcing from Korean and Chinese rack producers.

• The temporary 2027 sunset creates a cliff: downstream manufacturers making capital investment

decisions based on the 15% rate bear the risk that political appetite for reauthorization may not materialize.

Open questions

• Whether DHS/Commerce will publish guidance on Annex I-C country eligibility (15% vs 25%)

within the standard 90-day implementation window.

• Whether the agricultural equipment carve-out extends to farm implements and precision-

agriculture hardware, or only to tractors/combines explicitly listed in the annex.

• Whether the derivative-product designations for lithographic plates trigger exclusion-petition

rights under the inclusions process (BIS 90 FR 18780 — 2025-05-02 action).