The United States is turning Section 232 tariffs into firm-specific bargains

KUALA LUMPUR, 14 AUGUST 2026 —

US Shifts Section 232 Tariffs into Company-Specific Bargains, Reshaping Trade Rules

Under this approach, companies with approved onshoring plans can import covered products duty-free, with volumes tied to the capacity of the new facilities they pledge to build. The tariff rate a firm pays is now contingent on its commitments, rather than the nature of the imported good itself.

This marks a departure from earlier Section 232 measures, which were formula-based and narrowly applied. The first such programme, Proclamation 10925 in 2025, introduced an automobile-parts offset tied to US assembly value, while Proclamation 10984 allowed certain Canadian and Mexican metal producers to halve their tariffs by committing to new US capacity. These were limited in scope and followed strict criteria.

The new model, however, is more flexible. In pharmaceuticals, firms face a 100% tariff without an approved plan, 20% with one, and zero if they also agree to most-favoured-nation domestic pricing. The primary aluminium proclamation of July 20, 2026, offered a 50% reduction for applicants, while the Aug 6 polysilicon proclamation allowed for a full waiver. The drone measure added an immediate deferral for firms on approved government lists.

The implications are significant. Two companies importing the same component from the same country could face vastly different tariff rates based on administrative assessments of their commitments, rather than the product’s inherent characteristics. Neither the public nor affected firms have access to the approved plans or decision records, raising transparency concerns.

The shift also blurs traditional trade boundaries. A company-specific deal can override negotiated tariff ceilings between governments. For example, while US trade agreements may cap tariffs at 15% or 10%, an approved firm could pay nothing on qualifying volumes, provided it starts construction before Jan 20, 2029.

Industry coverage under Section 232 is expanding rapidly. As of 2024, the measures cover $975 billion of US imports, with the total expected to rise to $1.283 trillion—or 39.6% of goods imports—once all actions take full effect by February 2027. The four programmes with company-specific mechanisms account for $389 billion of this coverage, though the actual relief granted remains undisclosed.

The pharmaceutical proclamation, for instance, references 13 agreements but does not disclose their terms. The newer programmes have published no details on approved plans, volumes, or rationale. This opacity contrasts with the broader trade policy trend toward greater disclosure.

The economic stakes are high. The automobile and heavy vehicles sector, valued at $618 billion in imports, and steel ($241 billion), have not yet adopted onshoring programmes—but could follow. Watch for whether future Section 232 actions make onshoring commitments standard, and whether sectors like autos or steel are included.

The proclamations require criteria for approval to be published, but not the approvals themselves. This raises questions about accountability and consistency in enforcement. Meanwhile, firms on the Department of Defense’s Blue UAS Cleared List or the FCC’s Conditional Approval List—totaling over 100 companies as of Aug 14, 2026—receive immediate deferrals under the drone measure.

The pharmaceutical relief is time-bound: the zero tariff runs until Jan 20, 2029, after which the 20% rate reverts to 100% on April 2, 2030. Import values are calculated using USITC 2024 data at the HS 8-digit level, matched to each programme’s scope, though these reflect trade covered, not actual duty relief.

For Malaysia and regional exporters, the implications are mixed. Firms supplying components to US-bound industries—such as electronics, automotive parts, or pharmaceutical intermediates—may face uneven treatment depending on their customers’ onshoring plans. A Malaysian supplier to a US drone manufacturer with an approved plan could see its goods enter duty-free, while a competitor without such a plan faces 100% tariffs.

Stakeholders in Malaysia’s manufacturing and export sectors will need to monitor these developments closely. The US Commerce Department’s discretion in granting relief means that trade flows are increasingly shaped by corporate decisions rather than multilateral agreements.

As the Section 232 framework evolves, the line between trade policy and industrial policy continues to blur. The shift toward company-specific bargains signals a new era in global trade, where tariffs are no longer just about protecting industries—but about shaping where and how they are built.