Tariff rewrite puts cross-border metal trade in crosshairs

The policy shift would also change how tariffs are calculated, applying the duty to the full value of imported derivative goods rather than only the steel or aluminum content — a move intended to simplify compliance, but that could effectively increase costs for many imported products.

Impact on cross-border supply chains

In 2025, the U.S. imported roughly 13% of its steel and 60% of its aluminum consumption, with total metal imports (iron, steel, aluminum, copper) valued at approximately $154.9 billion, down slightly from 2024.

The main origins of metal imports to the U.S. last year were Canada ($27.2B), China ($18.5B), Mexico ($15.7B), Chile ($9.12B) and South Korea ($7.66B), according to the Observatory of Economic Complexity.

Many of these goods are produced through North America’s integrated supply chains, where raw metals may be melted in the U.S., processed in Mexico, and assembled into finished products that cross the border multiple times before final sale.

By applying tariffs to the full value of derivative products rather than just metal content, the new policy could increase costs for importers bringing finished or semi-finished goods into the U.S. from Mexico and Canada — even when the metal originally came from the United States.

Revenue and policy backdrop

The tariff overhaul is also tied to federal revenue. One estimate found that the proposed changes could raise roughly $70 billion in revenue through fiscal year 2036, helping offset revenue losses after the Supreme Court limited the administration’s tariff authority under emergency powers, according to the Committee for a Responsible Federal Budget.

The Trump administration originally expanded Section 232 tariffs last year, doubling steel and aluminum tariffs to 50% and extending them to thousands of derivative products ranging from tractor parts to stainless steel sinks and gas ranges. 

U.S.–Mexico metals trade by the numbers

• Mexico is one of the largest suppliers of steel to the U.S., particularly flat-rolled steel used in automotive and manufacturing.
• The U.S. and Mexico have deeply integrated auto and industrial supply chains, with metal parts often crossing the border multiple times before final assembly.
• Key industries impacted by steel and aluminum tariffs include:
  • Automotive manufacturing
  • Heavy equipment and machinery
  • Appliances and HVAC
  • Construction materials
  • Energy equipment and pipelines
• Many derivative products affected by tariffs include auto parts, tractors, industrial machinery, steel sinks, and household appliances.
• Cross-border manufacturing means tariffs applied to the full value of a finished product — rather than just metal content — can significantly increase total import costs.
• Laredo, Texas, is the largest U.S. trade gateway for steel-containing manufactured goods moving between the U.S. and Mexico.