On July 20, 2026, the President issued a proclamation establishing a new incentive program under the Section 232 aluminum tariff regime. Companies that commit to building, expanding, or refurbishing U.S. primary aluminum production capacity may be eligible to import a corresponding volume of primary aluminum at half the otherwise-applicable Section 232 duty rate—25% instead of the current 50%.

The proclamation responds to the Commerce Secretary’s view that U.S. primary aluminum supply remains insufficient despite existing 232 tariffs.  It modifies Proclamation 9704 of March 8, 2018, as amended by the April 2 and June 1, 2026 proclamations, and builds on the reduced-rate framework established for certain Canadian and Mexican aluminum and steel under Proclamation 10984.

Onshoring Incentive Program Basics

Eligible projects. Commerce is directed to solicit and approve “onshoring plans” from companies that commit to: building a new U.S. primary aluminum facility; expanding an existing facility to produce primary aluminum; or refurbishing an outdated primary aluminum facility to increase output or improve efficiency. Construction must begin no later than January 20, 2029.

Tariff benefit. Once Commerce approves a plan, the company—or its designated representative—may annually import a quantity of primary aluminum tied to the project’s reasonably anticipated annual output after completion. Those imports would be subject to half the otherwise-applicable Section 232 rate. For refurbishment projects, the benefit is capped at the value of the company’s investment.

Commerce review. Commerce will evaluate each plan based on factors such as the expected construction start date, whether the project timeline and milestones are commercially reasonable, anticipated annual production, the reliability of cost and production projections, and how reduced-rate import benefits should be allocated among applicants.

Compliance and clawback risk. Approved plans will be monitored and enforced. Commerce may require compliance reports, including externally audited reports, to confirm that domestic manufacturing commitments are being met. If a company substantially fails to satisfy its commitments, Commerce may stop and rescind the tariff benefit. If the government finds fraud or deliberate misrepresentation, rescission may be retroactive, and CBP may collect additional duties, fines, and penalties.

Implementation. Commerce, in consultation with DHS, USTR, and the ITC, will implement any necessary HTSUS changes through a Federal Register notice.

Key Takeaways

• The benefit is forward-looking but may produce immediate duty savings. Import eligibility is tied to anticipated output from a completed project, which means approved applicants may be able to import at the reduced rate while construction is still underway.
• The “designated representative” concept may allow companies to allocate the benefit to affiliates, trading partners, or other parties. Applicants should explain that allocation clearly in the onshoring plan because Commerce is likely to scrutinize it.
• The central compliance risk is the production forecast. Because retroactive rescission and penalties are possible, applicants should support projected output, costs, timelines, and milestones with commercially reasonable and auditable documentation.
• Detailed application procedures, required plan contents, and timing will follow in Commerce guidance. Companies with credible U.S. primary aluminum projects should begin preparing support now rather than waiting for the implementing notice.