The Trump Administration Clarifies its 232 Metals Tariffs

For primary metals imports, no change. For derivative products, a simplified rate.

Last week the Trump administration announced modifications to Section 232 tariffs levied on steel, aluminum and copper imports – and clarified what the tariff rates will be for derivative products too. The result appears to be a simplified process for determining which imported goods will get what rates that basically maintains the overall 232 regime.

From Bloomberg:  

Officials on Thursday cited consumer products such as dental floss, which has a small metal piece to cut the floss but otherwise lacks significant steel or aluminum content, as an example of products that would be see relief from the metal tariff changes. Washing machines are also expected to benefit.

So what’s really changed? For the tariffs on purely metals products – think aluminum ingots and coils of steel – nothing. The rate for items made entirely or almost entirely made of those metals (including copper) will remain at 50%. For derivative products – those that aren’t entirely made of those metals but contain a significant amount of them – will get a 25% rate. Instead of being determined by a complicated calculation that determines the metal’s contribution to a product’s total value, that 25% will apply to the total value.

“We’ve simplified it,” a senior administration official told the Hill. “Made it much more simple to import to America.”

And there are a few other tiers to note. Imported products made entirely of American metals will face only a 10% rate, for instance. Under the new structure, tariffs will be waived if “derivative ​products made with steel, aluminum and copper if the product’s content of the metals is below 15% by weight,” reports Reuters. And some imports of metal-intensive industrial and electrical grid equipment will see rates drop to 15%. That last one is temporary, and designed to “accelerate an industrial build-out.”

The Alliance for American Manufacturing in a February letter urged the administration to keep these tariffs strong. “Clear rules can help Customs and Border Protection prevent undervaluation, misreporting, and other practices that erode the intent of the Section 232 actions,” we wrote. “However, clarification should not become a vehicle for narrowing coverage, reducing effective tariff rates, or creating new pathways for circumvention.” This update to the 232 metals tariffs seems to have threaded that needle. You can read more about last week’s announcement here.