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On August 18, 2025, the U.S. Department of Commerce added 407 new steel and aluminum derivative products to the list of imports now subject to a 50% tariff under Section 232.

For shortline farm equipment manufacturers, this means you’ll need to determine whether any of your imported products are affected and accurately report the steel and aluminum content value when submitting entry documents to U.S. Customs and Border Protection.

While there’s no one-size-fits-all solution, here’s a summary of what could help you, along with strategies and tips from Marc Schneider, a business advisor at the Center for Industrial Research and Service (CIRAS) at Iowa State University:

Mitigation Strategies

These approaches can help reduce the financial impact if your products are subject to the 50% tariff:

• Steel Valuation vs. Total Price
  The 50% tariff applies only to the steel content value within an imported product—not the total price. This may include the cost of steel components but exclude non-steel parts, processing, and overhead.
  • Work with suppliers to break out steel vs. non-steel costs on your invoices.
  • Request a certificate of steel content from suppliers if your products include mixed materials (e.g., 50% plastic, 50% steel).
• Duty Deferment
  To assist with cash flow management, consider using a bonded warehouse. Your goods remain legally “in transit” until they’re used, which can delay payment of the tariff — though it will still apply eventually.
• First Sale Pricing
  If you buy steel through a wholesaler, you may be able to declare the import value based on the original producer’s price rather than the reseller’s price. However, this requires transparency from middlemen, which can be challenging.

Avoidance Strategies

These options focus on reducing or avoiding the 50% tariff altogether:

• Source from Countries with Lower Tariffs
  Some countries currently face reduced rates:
  • United Kingdom: 25%
  • South Korea: Possibly 15% (not yet finalized)
  • European Union: Reduced rates are under negotiation
  • Canada & Mexico: Potential lower rates under USMCA rules
    Also consider the “melt and pour” requirement, which determines tariff eligibility based on where the steel was melted and poured, not just where it was finished.
• Source Domestically (0% tariff)
  Domestic steel may be more expensive upfront but could be cost-effective overall once tariffs, freight, and import fees are factored in. CIRAS offers a Total Cost of Ownership (TCO) model to help evaluate options.
• Re-Engineering Products
  In some cases, redesigning equipment to use less steel or alternative materials could help reduce exposure to tariffs, though feasibility depends on the application.

Industry Trends: The “Wait-and-See” Approach

Many manufacturers are holding off on major changes while waiting for:

• Trade negotiations with specific countries to conclude
• Ongoing court cases that could affect the federal government’s tariff authority (courts have upheld Section 232 tariffs, but challenges remain around measures based on the International Emergency Economic Powers Act (IEEPA)
• Adjustments in global production locations and trade flows

Key Recommendation

Because the rules are complex and the stakes are high, we strongly recommend working with a formal import expert:

• Licensed customs broker
• Freight forwarder
• International trade attorney

These experts can help you calculate the correct steel and aluminum values for your shipments and ensure compliance.

Disclaimer

CIRAS’s mission is to summarize what we are seeing in the industry, share best practices, and to help manufacturers navigate their way through some of these changes. We are NOT legal experts, international customs agents or political advisors so the members of FEMA should always seek professional legal or customs advice where needed.

FEMA Member Legal Benefits

This article was prepared with guidance from John Turlais, partner at Foley & Lardner LLP, who provided insight into the legal considerations surrounding Section 232 and IEEPA-based tariffs.

As part of your membership, FEMA members are eligible for a free, 60-minute confidential legal consultation with attorneys at Foley & Lardner LLP who specialize in dealer contract law. To schedule a consultation, contact Foley & Lardner at (414) 319-7303.