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Trump Team Aims to Ease Tariff Confusion With New Steel Plan
Some Products in Tiered System Will Maintain Tariff Rate of 50%, While Others Will Have Duties Lowered to 25% or Less
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Key Takeaways:
- The Trump administration plans to announce a tiered tariff system on steel and aluminum derivatives, keeping 50% duties on many products while applying 25% or lower rates to others.
- Officials said the change responds to company complaints that content-based tariffs were hard to calculate and hurt sales and profits, with shares of major metals producers falling after the news.
- The plan, expected as early as April 2, would shift duties to full product value and could be adjusted if imports do not decline or trade data fails to improve.
The Trump administration is preparing to outline a tiered system for its broad tariffs on steel and aluminum products in an attempt to simplify a process that has dogged American companies for months.
The U.S. will maintain 50% tariffs on a large number of derivative products in which the duty will be calculated by the value of the actual imported good, according to multiple people familiar with the matter who spoke on condition of anonymity to detail the plans. Many other products will be tariffed at a lower 25% rate, while some products will fall below that duty level.
The expected announcement, which could come as early as April 2, comes in response to immense pushback from American companies that have complained to the Trump administration that the president’s widespread tariffs on products that contain steel and aluminum materials make it difficult to quickly calculate the appropriate charges on imports.Ìý
This difficulty, which buyers had brought to the attention of Commerce Secretary Howard Lutnick, U.S. Trade Representative Jamieson Greer and others, threatened to hit company sales and profit, according to the people.
Shares of Century Aluminum Co. and Alcoa Corp. fell more than 1.6% in US postmarket trading while steelmaker Commercial Metals Co. sank 1.4%.
The Wall Street Journal previously reported April 1 that a 25% rate would apply to derivative products.Ìý
The White House did not immediately respond to a request for comment.
The administration is shifting the tariffs from content to the full value of the imported product, according to the people. All items in harmonized tariff scheduleÌýChapter 72Ìýand most inÌýChapter 73Ìýwill remain at the full 50% duty, and would be calculated by the value of the actual imported goods, the people said. As an example, an imported steel pipe would be charged a 50% duty, not just the steel in the pipe.
Certain items inÌýChapter 76Ìýwill incur a 50% duty. Products under the rest of the chapters that include steel and aluminum would get a 25% tariff, according to the people. One of the people said these duties are subject to change if imports don’t decline or if import data shows the situation hasn’t improved.
According to one of the people, companies and officials had problems assigning duties to a large number of items, including consumer products such as dental floss, which has a small metal piece to cut the floss but otherwise has no other measurable steel or aluminum. If an item’s total steel or aluminum content drops below 15% of the product, the tariff rate will fall to zero, the people said.
The move comes as the Trump administration is dealing with voter discontent over the economy, fueled by worries over the cost of living. That dynamic threatens to undercut Republican efforts to retain control of Congress in midterm elections this November. Even as the Supreme Court struck down some of Trump’s country-by-country tariffs, he has taken steps to rebuild that trade regime and forge ahead on industry-specific levies.
Trump last year imposed a 50% levy on foreign steel and aluminum in a measure aimed at Chinese overcapacity. The decision wound up hitting other major trading partners hard, including Canada, the European Union, Mexico and South Korea. Later added to the list were so-called derivative products that contained the metals, creating an arduous task for companies to identify the percentage of the materials in goods they sourced from overseas.
Written by Joe Deaux, Jennifer A. Dlouhy, Annmarie Hordern and Courtney Subramanian
