Washington Moves to Simplify Steel and Aluminum Tariffs After Pressure from Companies

SadaNews - The administration of U.S. President Donald Trump is preparing to announce a tiered tariff system for its extensive tariffs on steel and aluminum products, in an effort to simplify a process that has burdened American companies for months.

The United States will maintain a 50% tariff on a large number of derived products, with tariffs calculated based on the actual value of the imported goods, according to several sources familiar with the matter who spoke on condition of anonymity to discuss the plans.

Additionally, a lower tariff of 25% will be imposed on many other products, while some products will be subject to tariffs below this level.

Tiered System to Simplify Tariffs

The expected announcement, which could come as soon as Thursday, is in response to significant pressure from American companies that have complained to the Trump administration that the broad tariffs imposed on products containing steel and aluminum make it difficult to quickly determine the appropriate tariffs on imports.

Sources indicated that this difficulty, which buyers brought to the attention of Commerce Secretary Howard McLarty and U.S. Trade Representative Jameson Greer among others, was threatening to negatively affect company sales and profits.

Shares of Century Aluminum and Alcoa fell more than 1.6% in after-hours trading in the U.S., while Commercial Metals' shares dropped by 1.4%.

The Wall Street Journal reported on Wednesday that the 25% tariff would apply to derived products. The White House did not immediately respond to a request for comment.

Shift in Tariff Calculation Methodology

The administration had been working to shift the calculation of tariffs from metal content to the full value of the imported product, according to the sources.

All items listed in Chapter 72 of the Harmonized Tariff Schedule, as well as most items in Chapter 73, will still be subject to a 50% tariff calculated based on the actual value of the imported goods, sources indicated. For example, a 50% tariff will be imposed on an imported steel pipe, not just on the amount of steel within it.

Some items in Chapter 76 will also be subject to a 50% tariff. Products containing steel and aluminum that fall under the remaining chapters will incur a 25% tariff, according to the sources. One source stated that these tariffs could change if imports do not decrease, or if the data shows that the situation has not improved.

One source noted that companies and officials faced difficulties in determining tariffs for a large number of goods, including consumer products such as dental floss, which contains a small metal piece for cutting the floss, but does not contain measurable amounts of steel or aluminum. If the proportion of steel or aluminum in the product falls below 15%, the tariff rate could drop to zero, according to the sources.

Increasing Political and Economic Pressures

This step comes at a time when the Trump administration is facing voter dissatisfaction over the economic situation, driven by concerns about the cost of living. This situation threatens the Republicans' efforts to maintain control of Congress in the midterm elections in November.

Although the U.S. Supreme Court has struck down some tariffs imposed by Trump on a country-by-country basis, he has taken steps to rebuild this trade system and move forward with targeted tariffs on specific sectors.

Trump imposed a 50% tariff on foreign steel and aluminum last year in a move aimed at curbing excess production capacity in China. This move had significant effects on other key trading partners, including Canada, the European Union, Mexico, and South Korea.

Later, derived products containing these metals were added to the list, creating a daunting task for companies to determine the percentage of materials used in the goods they import from abroad.