A recent lawsuit filed on January 27 is challenging how U.S. Customs and Border Protection (CBP) has applied its Section 232 steel and aluminum content valuation policy to certain imported goods, specifically machine screws and fasteners.
The importer argues that CBP relied on informal internal guidance—rather than properly issued regulations—when determining how additional Section 232 duties should be assessed on steel derivative products. According to the complaint, a December memo issued by CBP’s Base Metals Center of Excellence and Expertise (CEE) effectively established a binding valuation policy without undergoing the required public notice-and-comment process.
Background on the Policy Dispute
The dispute follows a June 2025 presidential proclamation that increased Section 232 tariffs on steel and aluminum to 50%. The proclamation specified that the additional duties apply only to the steel or aluminum content of covered products under Chapters 73 and 76 of the Harmonized Tariff Schedule.
In response, CBP issued public guidance stating that when the steel or aluminum content represents less than the total value of an imported article, importers may separate the value into two tariff lines—one for the metal content and one for the non-metal content.
CBP also released an FAQ explaining that the value of the steel or aluminum content should be based on the price paid or payable for that content, excluding transportation and insurance costs, and typically supported by the invoice.
Concerns Raised by Importers
The lawsuit claims that subsequent internal CBP guidance, including the December CEE memo and related information requests (CF-28s and CF-29s), departed from this public guidance. The memo reportedly states that:
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Articles consisting entirely of steel or aluminum are subject to the 50% tariff on their full entered value, without excluding fabrication, labor, overhead, or profit.
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For mixed-material goods, “non-steel content” does not include fabrication, machining, labor, or other manufacturing costs.
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Importers may only subtract the cost of a discrete non-metal component, not broader value-added expenses.
The importer argues that this approach effectively expands the scope of Section 232 duties beyond the metal content itself.
Legal and Compliance Issues Raised
According to the complaint, the internal memo is invalid under the Administrative Procedure Act because it was never published as a regulation or subjected to public rulemaking. The lawsuit also alleges that the valuation method conflicts with U.S. customs valuation law, which prohibits appraisements based on arbitrary values or systems that automatically apply the higher of two possible values.
Additionally, the importer contends that requiring disclosure of non-steel content values amounts to a new information collection under the Paperwork Reduction Act, which would require approval from the Office of Management and Budget—approval that was not obtained.
Why This Matters for Importers
The case highlights ongoing uncertainty around how CBP interprets and enforces Section 232 duties for steel and aluminum derivative products. For importers, this underscores the importance of:
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Closely monitoring CBP guidance and enforcement trends
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Maintaining detailed cost and valuation documentation
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Seeking expert compliance support when classifying and valuing mixed-material imports
As the case proceeds, it may have broader implications for how CBP issues guidance and how Section 232 duties are applied across affected industries.
