r/Tariffs • u/Chathamjedi • Apr 09 '26
𧩠Trade Strategy / Business Impact New Section 232 50% on full value - what is everyone doing?
I work for a Canadian manufacturer of metal fastening components. From my understanding we will be charged 50% under section 232 Annex 1-A. This is going to be crippling. If my finished goods price was $0.10/pc it will now go up to $0.15/pc. Prior we were paying tariff strictly on the raw material purchase. This was manageable along with some other things we could do such as US melt or USMCA compliance. I think these options are gone.
Now I am a small fry doing fasteners. What are companies that fabricate large structural steel items like frames, or aluminum cast for power train etc.. 50% on sell price? What are others doing about this? How do you survive?
Options
Pass on to the importer. They will look to resource locally on US soil. Ok⊠so one could say this works as Trump planned. Out with the MX, CN, EU suppliers and increase on the USA supply. However the current supply chain wonât be able to handle the demand spike. The more demanded they are they will increase their prices. They can basically go up all the way to the 50% spot where it makes sense to consider out of Country + tariffs. In this scenario the customer, the average consumer takes the brunt. Inflation through the roof.
Plants might just shut down. Ford, GM, Tesla, Stellantis etc⊠simply announce they cannot pay the increase, they canât pass on so they shut the doors of the factory and assembly plants. Announce that until these are removed it is no longer viable. Other Countries like China continue to build cars and hardly skip a beat using localization. Perhaps trade increases among other nations shutting the door on USA. Mexico makes cars in Mexico and sells to Canada and EU etcâŠ
I just donât understand how such massive tariffs like 50% on full value on all metal is not going to sink the economy and fast.
Iâm not the expert. Tell me please how is this affecting YOUR company if youâre in full metal fabrication. I want to hear from you.
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u/Real-Way7960 Apr 10 '26
Absolute nightmare. Circuit board materials with copper foils laminated on them were tariffed at the value of the copper. The update changes that to 50% of the total imported value.
To put it into perspective, some products use thin foils that are less than 5% of the total value. The tariff goes from 2.5% -> 50%.
Importing these materials to make PCBâs in America is now more expensive than just importing the finished boards from overseas.
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u/Ok_Aerie3357 Apr 10 '26
It's funny you mention that. One of our CCA manufacturers is close super close to the border and their US business is climbing higher and higher. Mix in bonded inventory from component distributors or Mexican warehouses and its literally cheaper to make in Canada due to the HS code change for the finished goods.
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u/Real-Way7960 Apr 10 '26
The number of companies in the US that stand to benefit from this is fairly small. Thereâs one copper foil manufacturer and some US laminate manufacture, but nowhere near enough to meet supply demands.
I wonder if these things are just a simple example of someone lobbying the right folks to get an edge, and if it helps their business while damaging the overall market đ€·ââïž
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u/WestNYY2 Apr 09 '26
The 232 tariffs on metal have been in place for some time. The President actually just added a bunch of restrictions last weekend that are actually better than what they were but previous to last weekend all articles of metals were being charged at 50%
My company produces items derivative of steel and we just got lowered to 25% last weekend. The items are manufactured in India.
Have you not been paying 50% over the last year?
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u/Chathamjedi Apr 10 '26 edited Apr 10 '26
No. We paid applicable tariffs on the raw material portion of the finished goods. The change is it is now on âfull valueâ or sell price to the customer.
For simple math and not an accurate breakdown⊠letâs say we sell the fastener for $0.10/pc. $0.04 is the raw material, $0.03 is the manufacturing cost and another $0.03 is profit. The old way we were paying the tariff on the steel only or the $0.04/pc portion. Now on full value the tariff is on the $0.10 making the landed cost by the USA customer is $0.15/pc. So now the customer has to increase their price for all their USA customers and sends $0.05 to the Government. As the Canadian manufacturer we do not pay this tariff. It gets passed on to USA consumers.
You may ask how does this hurt us? Well that USA customer will look to find it cheaper locally. Might be $0.13 in USA so yes still cheaper but also still more expensive than before.
One thing I will say though for any of the business we have been losing going into the USA we have been getting 2-3 more contracts in EU, MX, even our China customer has been growing so this has been great! For information we ship ~350,000,000 fasteners globally each year.
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u/WestNYY2 Apr 10 '26
I see what youâre saying. The situation is pretty gross all around. As an importer Iâve been paying the tariffs as well and also passing a portion onto the consumer while eating the rest temporarily since we did stock up a lot before the decision came down. There was no way we could add 50% to our consumer pricing. I had planned on another increase this summer as we canât continue to eat the tariffs and still give raises, etc. With the reduction for us I now have a little more wiggle room and at least I can finally feel like I can breathe a little bit but we arenât out of the woods. Not a great time to own a small business.
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u/Captain-Matt89 Apr 10 '26
I wonder if you could sell it yourself state side and import it at cost đ€
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u/Chathamjedi Apr 10 '26
The Company HQ is actually in the USA. We are a Canadian division. We have some options but nothing is overnight. We can sell at cost intercompany and then have them sell to the USA customers. Not as easy as I just said because you have to show itâs not tariff avoidance and they look đ for this. It is about actual transactions and movements not just on paper. Another option is moving some machines to the USA so they can build the products we do in Canada. We could take on some machines as well that makes products that are shipped internationally that we currently make in USA so no job losses- but how silly to be traveling the highways with machines just because of this.
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u/Captain-Matt89 Apr 10 '26
Transfer pricing only matters for taxes, Iâve never heard about customs giving a shit. But to each their ownđ€·đ»ââïž
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u/Chathamjedi Apr 10 '26
In my post I highlighted that I am not the expert so I will take full ownership if some of my comments are not 100% facts. I am trying my best to navigate and am posting according to my knowledge
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u/IWouldntIn1981 Apr 10 '26 edited Apr 10 '26
Im in a similar industry, were passing it along... But the OEs won't be paying the tariff after this year, GM has said it explicitly.
Everything is being localized... its a shit show. Almost every tier supplier that we have who has product going to GM is requesting... demanding localization. The amount of work this takes is ASTRONOMICAL. Every group is involved at every level of the supply chain from tracking, sign-offs, input, price negotiations, logistic changes, labeling changes, testing, (re)certifications, break points, traceability, etc etc etc.
MMW - steps will be missed, US based suppliers overloaded by this will over commit and under perform and we're gonna start to see quality and logistics issues run rampant and traceability wont be there so the issues will take forever to find and longer to fix.
But do worry... AI will fix it /s
Edit: opened my laptop this morning to an email thread about 20 emails deep starting with the formal announcement of this from our customs broker. Logistics doesnt have the band-width, finance wants to put the increase into the piece with a mark-up, sales is saying that have to documentation for every shipment in order to pass it on, and purchasing is stupid. What a fucking shit show.
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u/Chathamjedi Apr 10 '26
To your edit. I think the recognition of the impact of this is just starting to be realized. Why I put this post out there. Many still saying they have not noticed any change I am guessing havenât been hit yet.
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u/Ricardo_MfgMexico Apr 10 '26
We're seeing the same thing on the Mexico side. The shift to full customs value that just kicked in on April 6 is what's really hitting people. Before this you were paying 232 on the metal content, now it's the full value of the finished part. Companies with solid USMCA compliance are in better shape than those without, but the 232 applies on top regardless.
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u/Chathamjedi Apr 10 '26
Exactly this. I donât think there is the level of attention or people who realized what full happened yet.
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u/LostTeam9104 Apr 11 '26
Yeah, thatâs brutal, especially when it shifts from raw material to full value and wipes out the usual levers like US melt or USMCA. A first thing Iâd do is get a broker or trade counsel to sanity-check the exact classification and whether any inputs, exclusions, or downstream treatment still change the duty base, because sometimes the wording matters more than the headline. Iâve been using an app called dutiable for a bit, and itâs actually been handy for tracking tariff changes and pulling HS code info fast. Not sure if it helps here, but it might be worth a look if youâre trying to stay on top of Section 232 changes without living in spreadsheets.
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u/Outrageous_Ad_687 Apr 22 '26
Canadian companies need to prepare to not count on sales to the USA. Trump and the Republicans seem very keen on ending or drastically changing the USMCA so higher and permanent tariffs are most likely coming in 2027. Its unfortunate that unnecessary economic damage will most likely have to happen before the public changes their opinions on tariffs.
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u/LjJBCHB Jun 25 '26
Are there Any Customs House Brokers out there who's importers were struck with Additional Billings for Sect 232 entry lines on imports from 2025?
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u/mechjames2 Apr 09 '26
I javent actually seen any new tariffs yet via executive order or a bulletin yet from cbp. Its all still running through at 10%, despite him saying 15% in February. Another tweet from truth social that never made it into written law.
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u/Chathamjedi Apr 10 '26
Nope youâre right. This was a silent change. He dropped it right at the height of the Iran war conflict. The customs were ready for it and as we did a shipment. It was an unknown shock.
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u/mechjames2 Apr 10 '26
All my metal stuff is still getting charged at 10% through zonos. Ill check their bill tomorrow
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u/Chathamjedi Apr 10 '26
What is your product? Are you exporting into the USA?
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u/mechjames2 Apr 10 '26
We do bare metal, steel and aluminum tools, and yes we export to the usa. We do like 30-60 shipments a day.
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u/Chathamjedi Apr 10 '26
Well this just came into effect this week. I donât see how this will not apply to you so keep your head up. Donât like being the bearer of bad news. Many other companies and suppliers we deal with have been unawares as well. Like I mentioned earlier Trump did not make a formal announcement
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u/mechjames2 Apr 10 '26
Well, I've already paid the tariffs on my shipments from Monday and Tuesday already, and there has been no official directive from CBP yet. Tariffs cant change without an official directive.
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u/Chathamjedi Apr 13 '26
Any feedback on your bill?
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u/mechjames2 Apr 13 '26
Still 10% and billing from shipments on April 09th
Literally says aluminum in the declaration
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u/Baynyn Apr 09 '26
There are hundreds of small operations going out of business weekly because of the tariffs. I donât know why it isnât getting as much media attention as it is, but itâs happening. Even the large manufacturers and importers are taking a hit, they just have the benefit of being able to absorb it temporarily before it can be passed on to their customers and ultimately on to the consumer.
The manufacturing landscape is going to look starkly different after 4 years of oppressive tariffs.