Section 232 Derivative Full Value Rule: When 50 Percent Hits the Whole Invoice

The Section 232 derivative articles list expanded materially in 2025. Hundreds of HTS subheadings across chapter 84, 85, 87, 94 now fall into derivative scope. The rule that should govern is straightforward: 50 percent applies only to the steel or aluminum value portion of the derivative article. The rule that often applies in practice is harsher: without a producer affidavit identifying the metal value share, CBP defaults to applying 50 percent to the entire invoice value.

This guide covers the affidavit requirement, the documentation specifications, the default penalty math, and the protest workflow for importers caught without an affidavit at filing.

The two scenarios

Scenario A: importer provides affidavit at filing.

Section 232 applies to the metal value share only. For a 100,000 USD derivative article with 20 percent steel value share, the dutiable steel portion is 20,000 USD. 232 at 50 percent equals 10,000 USD. The rest of the invoice (80,000 USD) is subject to the standard duty stack without the 232 layer.

Scenario B: no affidavit, CBP default.

50 percent applies to the full 100,000 USD. 232 duty equals 50,000 USD. The non-metal portion of the article is duty-stacked unnecessarily.

The default-rule penalty is 40,000 USD on this example. Across a year of monthly shipments at this scale, the cost is half a million USD that would not have been owed with the affidavit in place.

The producer affidavit requirement

CBP requires the affidavit to contain at minimum:

1. Steel or aluminum content expressed by weight (kilograms) and by value (USD or invoice currency).
2. Country of origin of the metal specifically meaning the smelt or melt country, not the country where the derivative was finished. For steel, the melt-and-pour country. For aluminum, the smelt-and-cast country.
3. Producer name and facility including physical address. For derivatives where multiple metal sources are blended, identify each source.
4. Heat or melt numbers for the actual metal batches used in the production run. Each metal heat or melt batch has a unique number assigned by the mill.
5. Producer certification signed by an authorized representative attesting to the accuracy of the data. The signatory accepts liability for false statements under 19 USC 1592.

Most steel and aluminum mills issue Mill Test Reports (MTRs) as part of standard commercial documentation. These typically contain the heat number, chemistry, and basic origin data. Whether the MTR doubles as the Section 232 affidavit depends on whether it explicitly identifies the smelt or melt country and is signed at the certification level.

When the MTR is silent on smelt or melt, the importer needs a supplemental affidavit from the producer. This is the most common documentation gap.

Worked example: steel-rich derivative (HTS 7308.90 steel structure)

A US importer brings in a 200,000 USD pre-fabricated steel structure assembly from China. HTS 7308.90 (other steel structures). Pure steel article in scope of original chapter 73 Section 232. No derivative split needed; whole article is steel.

Effective rate 75 percent. Note: this article is pure steel so the affidavit is not splitting metal vs non-metal. The affidavit still identifies the melt country for evidentiary purposes; without it, CBP applies the same 50 percent (no penalty in this case since the article is already 100 percent steel).

Worked example: derivative with 15 percent metal value (HTS 8418.99.80 refrigerator part)

A 100,000 USD shipment of refrigerator door frames from Korea. HTS 8418.99.80. The frame is aluminum-faced ABS plastic with steel hinges. Aluminum content 12 percent of value, steel content 3 percent.

With proper affidavit:

Effective rate 23.10 percent.

Without affidavit (CBP default):

Effective rate 52.85 percent.

Default penalty: 29,750 USD on a 100,000 USD shipment (the 50 percent 232 default on the unjustified 85,000 of non-metal value, less the 15 percent Section 122 that would otherwise have applied on the same value).

The Korean producer can document the aluminum and steel portions easily; the cost of obtaining the affidavit is essentially zero (the data is already on the MTRs). The cost of not obtaining it is 29,750 USD per shipment net of the Section 122 anti-stack offset (or 42,500 USD looking at the Section 232 line alone).

Worked example: derivative with 30 percent metal value (HTS 8516.90 heating part)

A 50,000 USD shipment of electric stove heating elements from Vietnam. HTS 8516.90 (parts of electric heating equipment). 30 percent aluminum content, 5 percent steel content.

With affidavit:

Effective rate 39.35 percent.

Without affidavit (default):

Effective rate 71.85 percent.

Default penalty: 16,250 USD.

How to set up the affidavit workflow

For recurring shipments, the affidavit can be a master document covering the production line. Update annually or when the metal source changes. Specific implementation:

1. Identify which of your imported HTS lines are on the derivative annex. Pull the current Federal Register notice to verify.
2. For each affected supplier, request a master affidavit covering the metal value share, smelt or melt origin, and producer certification.
3. Store the master affidavit in your import file. CBP can request at any entry.
4. For each shipment, include a reference to the master affidavit and a per-shipment heat number list (typically from the MTRs).
5. Reconcile annually to confirm the master affidavit still reflects production reality.

Total annual cost for a steady supplier base: a few hours of compliance time per supplier. Annual savings vs the default penalty: typically 50,000 to 500,000 USD depending on volume.

Protest workflow if no affidavit at filing

If you imported without the affidavit and paid the default, you have 180 days from liquidation to file a protest under 19 USC 1514. The protest:

• Cites the affidavit as new documentary evidence.
• Recalculates the duty on the metal value share.
• Requests refund of the over-collection plus interest.

CBP review timeline: 12 to 18 months typically. Refund interest accrues at the published CBP rate (around 7 percent in 2026).

The protest works but the cash flow drag is real. Front-loading the affidavit at filing is the better business practice.

Run your derivative entry now

The LandedFees calculator handles Section 232 derivatives with affidavit-driven metal value split. Plug in the metal value share and the engine computes the affidavit-correct duty alongside the default-rule penalty so you can see the affidavit value before filing.

Calculate a derivative entry

Section 122 status as of June 20 2026

The May 7 2026 Court of International Trade ruling in Oregon v. United States (consolidated with Burlap and Barrel v. United States) struck down the Section 122 proclamation. The Federal Circuit issued an administrative stay on May 12 2026, so CBP is still collecting the duty pending appeal. Importers paying now should preserve protest rights and refund claims in case the government loses on the merits. The underlying Section 122 authority sunsets July 24 2026 under the statutory 150-day ceiling, regardless of the appeal outcome, unless Congress extends or a fresh proclamation restarts the clock.

Citations

• Section 232 aluminum 50 percent proclamation June 4 2025: Federal Register
• Section 232 steel 50 percent proclamation June 4 2025: Federal Register
• CBP CSMS guidance on producer affidavits: https://content.govdelivery.com/accounts/USDHSCBP
• 19 USC 1592 (false statements penalty): https://www.cbp.gov/trade/programs-administration/penalties/1592
• 19 USC 1514 (protest authority): CBP