April 2 - The Trump administration intends to overhaul its tariff approach for steel and aluminum products, maintaining a 50% duty on raw commodity steel and aluminum while cutting tariffs on finished or derivative products made from those metals to either 15% or 25%, according to two sources familiar with the plans.
Sources cautioned that details remain subject to change and that the measures will be formalized only through a presidential tariff proclamation, which is expected as early as Thursday. A White House spokesperson did not immediately respond to requests for comment.
Officials described the move as an effort to simplify a complex tariff regime created last year when the administration raised Section 232 tariffs on steel and aluminum to 50%. That earlier increase extended duties to thousands of derivative products that incorporate steel and aluminum - from tractor components to stainless sinks and gas ranges - with the goal of encouraging domestic production.
Under the prior approach the 50% rate applied only to the steel and aluminum content of assembled goods. Importers were therefore required to calculate the proportion of a product's value attributable to the metals, a process the sources described as a compliance headache.
The new plan would change that calculation by applying the lower 15% or 25% tariff to the total declared value of the imported derivative product, the sources said. That shift is intended to make compliance simpler for importers and customs authorities.
The forthcoming presidential proclamation is expected to include a revised annex that lists which products will be subject to each tariff rate. The sources indicated that certain steelmaking equipment could be eligible for the lower 15% rate. Such equipment - often imported from Germany and Italy - includes items like furnace ladles and rolling-mill machinery and typically is made from specialized heat-resistant alloys.
Those close to the policy said the higher tariffs were originally imposed to spur additional domestic investment in steel production, and that the adjustment for derivative items seeks to reduce administrative complexity while retaining strong protection for commodity metal imports.
Until the proclamation is issued, the scope and exact rate assignments may change, and affected industries will need to await the formal annex for definitive guidance.
Context for markets and industries
The proposal preserves a steep barrier for raw steel and aluminum imports while easing rates on a broad array of manufactured products that incorporate those metals. The change alters how import valuations will be treated for many goods and could affect cost calculations across manufacturing and supply chains.