The Trump administration is reportedly gearing up to bring in a new rule on imports, this time focusing on products made using steel and aluminium. According to a report by The Wall Street Journal, the US could soon set a 25% tariff on finished goods that contain imported steel and aluminium. The move may be announced as early as this week, people familiar with the plan said.
Donald Trump plans new 25% tariff on steel, aluminium goods
As of now, companies have to deal with a more complicated system. There is a 50% tariff, but it is applied only to the value of the steel and aluminium used inside a product. According to WSJ, a new plan aims to simplify things. Instead of calculating how much metal is used in each item, a flat 25% tariff would apply to finished products that include steel and aluminium. However, there is a catch. Products made almost entirely of steel and aluminium would still face the higher 50% tariff.
Last year, Trump had imposed a steep 50% tariff on foreign steel and aluminium. The goal was to counter excess production, especially from China.
But the impact went far beyond that. Major trading partners like Canada, the European Union, Mexico, and South Korea were also hit by these tariffs.
Which countries will be affected the most?
The countries that will feel the biggest impact are the ones most tied to the US market. Canada is likely to be hit the hardest, since it sends huge amounts of steel and aluminum to the US. Mexico is also vulnerable because a lot of its exports are parts used in US manufacturing, especially cars. Europe, particularly Germany, could feel the pressure too, while Brazil, another major steel supplier may try to handle the situation through talks.
In Asia, China, even though it doesn’t send much steel directly anymore, is still affected in an indirect way because its materials are used in products made elsewhere. countries like South Korea, Japan, Vietnam, and India will also take a hit, as they export large volumes of metal and finished goods to the US; however, the impact may not be too hard-hitting. Overall, the ripple effect could spread across global supply chains
Later, the rules were expanded to include “derivative products,” goods made using steel and aluminium. This made things even more complex.
Why the change is being planned
The administration has been trying to make these rules easier for businesses to follow. Many companies had struggled with the earlier system. Figuring out exactly how much steel or aluminium was inside imported goods turned into a difficult and time-consuming task. This new approach is meant to cut down that confusion.
The move also comes at a sensitive time. The Trump administration is facing growing frustration from voters over the economy, especially rising living costs. These concerns could affect Republicans as they try to hold on to control of Congress in the upcoming midterm elections in November. So far, the White House has not responded to requests for comment on the reported plan.