Section 232 and U.K. Country of Origin (COO) Issues

A recent Customs ruling highlights the importance of country of origin (COO) issues for U.K. companies and U.S. importers under the current “Trump tariffs.” Companies should carefully review any claims that the United Kingdom (U.K.) is the COO in light of this ruling and other legal principles, particularly where “Section 232” tariffs are involved.

Background: Throughout 2025, President Trump issued a number “Section 232” tariffs on steel, aluminum, and copper products. While some other tariffs have now been struck down by the Supreme Court, Section 232 tariffs remain.

The Administration’s Section 232 orders of 2025 raised the tariff rates on steel, aluminum, and copper as well as certain derivative products, from 25% to 50%. Not all products made from these materials are subject to Section 232 tariffs, and Customs has clarified that the value of the steel, aluminum, or cooper may be less than the value of the imported goods.

For those importing or selling certain steel and aluminum products into the U.S. , this dramatic increase in the tariff rate obviously brought a substantial economic challenge. However, there is a significant exception to the 232 orders of 2025. Steel and aluminum products originating in the U.K. are excepted from the 50% tariff rate and remain at the previous 25% rate for the present. Given that aluminum and steel may be sourced from a number of different countries and be manufactured or assembled in other locations, the COO becomes very important in this case.

COO is not necessarily the country of assembly or the COO for the component with the highest weight or cost. Instead, under case law and Customs regulations, the usual rule is that if an article undergoes further work or has material added in a country different from where it was manufactured, the work must effect a “substantial transformation” in order to make the new country the “country of origin.” The test for determining whether a substantial transformation has occurred is generally whether an article emerges from a process with a new name, character, or use, different from that possessed by the article prior to processing. Customs considers all the circumstances and makes a determination on a case-by-case basis. No one factor is decisive. Under some free trade agreements (FTAs), there are other rules, but the “substantial transformation” issue is often relevant under FTAs in various ways.

Customs Found Taiwan not UK to be the COO for Steel Plates: In a recent Customs Headquarter ruling, H327731, Customs found cold rolled stainless steel sheets had a COO of Taiwan even though they underwent significant processing in the U.K. before final export to the United States. After importation to the U.K. from Taiwan, the steel sheets underwent several process steps, including being inspected, coated with a protective material, and then being cut, deburred, and cornered to form the correct shape for their final use as laminate press plates. The process included polishing or peening, depending on the specific use, before inspection for export to the U.S.

Even though the steel went through a number of processing steps, Customs held that the COO was not determined by the number of steps, but that the COO for the goods was where they underwent a substantial transformation to a new name, character, or use. Customs determined that the manufacturing steps that occurred in the U.K. did not substantially transform the steel. The products were still steel sheets, just ones that were prepared for a specific application.

Contrasting an Older UK COO Determination: This latest ruling stands in contrast to a somewhat similar case from a decade ago. In H259473 from June 2015, the facts were different but the system also had parts that were manufactured in Asia and underwent final processing in the U.K.. In that case, the components and subassemblies of the pump in question were manufactured in an Asian country and it could be argued the processing performed in the U.K. didn’t effect a substantial physical transformation. However, Customs ruled the COO to be the U.K. because the system was flashed with software in the U.K., which substantially transformed the function to allow the pump to become the true medical device which was its ultimate purpose.

The difference in these rulings is characteristic of the nuanced nature of COO determinations. Given the Section 232 tariff savings that can occur from achieving and maintaining U.K. COO status, importers should carefully consider whether they can correctly claim a U.K. COO for their products. However, there are significant downsides to false COO claims and importers are well-advised to make these decisions carefully with the involvement of counsel. In some cases, it may make sense to ask Customs for a ruling to confirm the COO for a product.

Determining the applicable COO for some products is easy, but other times the process can be complex. If you need help navigating these issues, please contact us to discuss whether we can be of assistance.