US increases import duties on steel and aluminum

 

On Tuesday, the U.S. Commerce Department said that it was raising steel and aluminum tariffs on over 400 products, including furniture, railcars, motorbikes, marine engines, wind turbines, mobile cranes, appliances, bulldozers, and other heavy machinery, among hundreds of other items.

The department announced the addition of 407 product categories to the list of "derivative" steel and aluminum products subject to sectoral tariffs. These products will be subject to a 50% tariff on any steel and aluminum content in addition to the national rate for non-steel and non-aluminum content.

According to a research note by Evercore ISI, the decision will increase the overall effective tariff rate by about one percentage point and includes more than 400 product codes that accounted for more than $200 billion in imports last year.

The department is also included components for buses, air conditioners, and appliances like refrigerators, freezers, and dryers in the new levies, along with imported parts for automobile exhaust systems and electrical steel required for electric vehicles.

The U.S. lacks the domestic capability to meet the current demand, according to a group of international manufacturers that asked the department not to add the parts.

Citing a lack of U.S. capacity to make steel for use in EV drive units, Tesla (TSLA.O) unsuccessfully requested that Commerce deny a request to include steel components used in wind turbines and electric vehicle motors.

Compressors, pumps, and the metal in imported cosmetics and other personal care products, such as aerosol cans, are also subject to the new taxes, which go into force immediately.

"Today’s action shuts down avenues for circumvention and expands the reach of the steel and aluminum tariffs – supporting the continued revitalization of the American steel and aluminum industries," stated Jeffrey Kessler, Under Secretary of Commerce for Industry and Security.

Steel manufacturers had petitioned the administration to extend the levies to encompass more steel and aluminum vehicle parts, including Cleveland Cliffs (CLF.N), opens new tab, and Nucor (NUE.N), opens new tab.