Steel, Aluminum & the New 10% U.S. Tariff: What Packaging Buyers Should Know
In February 2026, the U.S. Supreme Court struck down the prior global tariff framework imposed under the International Emergency Economic Powers Act (IEEPA), ruling that the statute did not authorize broad tariff authority without congressional delegation. In response, the administration implemented a temporary 10% global import surcharge under Section 122 of the Trade Act of 1974, effective February 24, 2026.
For food and beverage manufacturers — and their suppliers of aluminum cans, capsules, and metal closures — understanding how this new measure interacts with existing steel and aluminum tariffs is essential for procurement and cost planning.
What Is the New 10% Tariff?
Following the Supreme Court’s February 20, 2026 decision invalidating IEEPA-based tariffs, the administration invoked Section 122 authority to impose a temporary 10% ad valorem surcharge on most imports. Section 122 allows the president to impose tariffs of up to 15% for a period of up to 150 days without prior congressional approval.
However, the proclamation includes important exclusions. Notably:
- Goods that qualify under the United States–Mexico–Canada Agreement (USMCA); and
- Products already subject to existing tariff regimes, including Section 232 tariffs on steel and aluminum
How Steel and Aluminum from Mexico Are Currently Treated
Steel and aluminum imports into the United States are primarily governed by Section 232 of the Trade Expansion Act of 1962, which authorizes tariffs on national security grounds. As of mid-2025, Section 232 tariffs on covered steel and aluminum products were increased to approximately 50% ad valorem for most countries. These duties remain in force and were not affected by the Supreme Court’s IEEPA ruling.
Section 232 applies to:
- Base steel and aluminum products
- Many derivative products, including manufactured goods where duties are assessed based on the metal content value
U.S. Customs and Border Protection (CBP) confirms that derivative products may be subject to Section 232 duties depending on classification and metal content.
Importantly, the new 10% Section 122 surcharge does not stack on top of Section 232 tariffs for covered metals.
USMCA and Tariff Exemptions for Mexican-Origin Goods
The United States–Mexico–Canada Agreement (USMCA) continues to provide duty-free treatment for qualifying goods traded among the three countries.
To qualify, products must meet strict rules of origin requirements. For steel and aluminum, these typically include:
- North American melt-and-pour requirements for steel
- Regional value content (RVC) and tariff shift criteria
- Smelting and casting requirements for aluminum
When these criteria are met, qualifying Mexican-origin steel and aluminum products may enter the United States duty-free under USMCA preference.
For packaging manufacturers — including producers of aluminum beverage cans and metal closures — USMCA compliance is therefore a decisive factor in avoiding tariff exposure.
What This Means for Beverage & Food Packaging Suppliers
a. USMCA Compliance Is Essential
Mexican steel and aluminum that meet USMCA origin requirements are exempt from both:
- The new 10% Section 122 surcharge; and
- Section 232 duties
Proper documentation — including mill test reports and certificates of origin — is critical to substantiating compliance (CBP, 2025).
b. Section 232 Duties Remain the Primary Cost Driver
If goods do not qualify under USMCA, they remain subject to approximately 50% Section 232 duties. This affects:
- Hot-rolled and cold-rolled steel coils
- Aluminum sheet and ingots
- Derivative packaging components used in can bodies and closures
For non-qualifying imports, Section 232 remains the dominant tariff exposure.
c. The New 10% Tariff Has Limited Direct Impact on Compliant Mexican Metals
Because the Section 122 surcharge excludes goods already covered by Section 232 and USMCA-qualifying products, compliant Mexican steel and aluminum used in food and beverage packaging are not subject to an additional blanket 10% tariff.
Strategic Takeaways for Capsules and Closures (C2) Clients
- Documentation Matters – Maintain complete USMCA origin certification and supplier verification.
- Understand Multiple Regimes – The Section 122 10% surcharge is temporary and does not apply to USMCA-qualified or Section 232-covered metals.
- Section 232 Still Drives Costs – Approximately 50% duties remain for non-qualifying imports.
- Proactive Planning Is Critical – Engage customs brokers to confirm HS classification, metal content treatment, and origin eligibility.
About Capsules and Closures
Capsules & Closures supports beverage and packaging supply chains with aluminum cans, can ends, caps, closures, and related components designed for reliability at scale. For questions on sourcing, pricing, or market conditions, contact Capsules & Closures directly.
