Section 122 affects most non-USMCA, non-Annex-II machinery imports at 15% on top of base MFN (often 0-5%). Section 232 derivative scope can pull some fabricated steel machinery components into the Section 232 stack instead. For SMB machinery importers, classification audit and USMCA qualification on Mexican-produced equipment are the main mitigation levers.
Industrial machinery imports – pumps, compressors, machine tools, packaging equipment, food processing – face Section 122 exposure on most non-USMCA flows. Base rates are typically lower than apparel, so the 15% Section 122 surcharge represents a larger relative increase.
For SMB machinery importers, classification work and USMCA analysis are the main strategic moves.
Effective duty stack for machinery
European or Asian-origin specialty machinery: base MFN (0-5%) + Section 122 (15%) = 15-20% effective.
Mexico-origin USMCA-qualifying: base MFN preferential. No Section 122. Effective: 0-2%.
China-origin machinery: base MFN + Section 122 + Section 301 (often 25%) = 40%+ effective on covered HS codes.
Section 232 derivative interaction
Section 232 steel and aluminum derivative scope expanded in 2025 to include fabricated steel and aluminum components. Some machinery products fall within derivative scope (paying Section 232 in lieu of Section 122); most do not. Component-level scope analysis is the relevant engagement.
Classification opportunities
Machinery HTS in Chapter 84-85 has dense subheading structure. Specialty equipment frequently sits at boundary between two subheadings with materially different rates. Mid-market machinery importers often have classification opportunities worth 3-8% of duty.
USMCA qualification on Mexican production
Mexican production of machinery and components can qualify under USMCA, exempting from Section 122 and providing base-rate preference. RVC analysis at 60% threshold (most non-auto machinery) plus origin documentation supports qualification.
Frequently asked questions
Are most machinery imports in Annex II?
No. Machinery is generally not in Annex II. Most non-USMCA machinery pays Section 122.
Does Section 232 derivative apply to all metal machinery?
No. Section 232 derivative scope is HTS-specific. Some fabricated steel and aluminum components fall within derivative scope; most finished machinery does not.
How does USMCA qualification work for machinery?
RVC at 60% threshold (typical) under transaction value or net cost methods. Plus origin documentation, supplier certifications, and Certificate of Origin issuance. See /usmca-cusma/.
What does machinery classification audit cost?
$5,000-$10,000 fixed-fee for typical SKU set. Larger catalogs priced per SKU bucket.
Are IEEPA refunds typical for machinery imports?
Yes – non-Section-232 machinery from non-USMCA origins typically paid IEEPA duty April 2025-February 2026. Recoverable through CAPE.
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