U.S. expands 50% steel, aluminum tariffs to 407 products, including auto parts

The Trump administration expanded Section 232 tariffs, adding 407 new categories of "derivative" steel and aluminum products, which are now subject to a 50% duty based on their metal content.

This tariff expansion includes a wide range of products, from heavy machinery and railcars to components for electric vehicles and consumer appliances, aimed at preventing circumvention and supporting U.S. steel and aluminum industries.

This move received backing from domestic steel manufacturers like Cleveland-Cliffs and Nucor, though foreign automakers expressed concerns that U.S. manufacturers might not meet the demand for these parts.

Tesla advocated against including essential steel products for electric vehicle motors in the tariff proposal, citing a lack of domestic production capability for the specialized steel needed.

Recommendation Rating: Enhanced Tariff Protections for U.S. Steel and Aluminum Industries

The Trump administration has significantly increased the scope of Section 232 tariffs by adding 407 new product categories classified as “derivative” steel and aluminum goods. These items are now subject to a substantial 50% duty based on their steel and aluminum content.

This expansive measure encompasses a diverse array of products, including wind turbines and their components, mobile cranes, bulldozers, heavy machinery, railcars, various types of furniture, compressors, pumps, and a multitude of other products.

Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, articulated the administration's stance: “Today’s action enhances the reach of the steel and aluminum tariffs and prevents circumvention, thereby bolstering the ongoing revitalization of American steel and aluminum industries.”

Additionally, the department has broadened the tariffs to include imported components for automotive exhaust systems, electrical steel designated for electric vehicles, and parts for buses, cooling systems, and consumer appliances such as refrigerators, freezers, and dryers.

The expansion of tariffs was championed by steel manufacturers such as Cleveland-Cliffs (NYSE:CLF) and Nucor (NYSE:NUE), who had advocated for increased protection on additional steel and aluminum automotive parts. Conversely, several foreign automakers responded with caution, urging the department against including these parts due to concerns that U.S. manufacturers may lack the capacity to satisfy current market demands.

Moreover, Tesla (NASDAQ:TSLA) attempted to persuade the Commerce Department to dismiss a proposal for including essential steel products for electric vehicle motors and wind turbines, arguing that no domestic capability exists to produce the specialized steel required for its drive units.