Trump's expanded metals tariffs to hit goods from horseshoes to bulldozer blades
US President Donald Trump's bulked-up tariffs on steel and aluminum due to launch within hours will hit nearly US$150 billion worth of derivative products made from the metals, ranging from nuts and bolts to bulldozer blades and threatening cost increases for industry and consumers alike.
The metals tariffs were set for an effective increase to 25 per cent as prior exemptions, exclusions and quotas expire at 12:01 a.m. EDT (0401 GMT) on Wednesday, with hundreds of downstream products subjected to the duties for the first time.
Trump on Tuesday lashed out at Canada amid rising trade tensions with the US ally, threatening 50 per cent tariffs on Canadian steel and aluminum, but later backed off after Ontario Premier Doug Ford withdrew a 25 per cent surcharge on the province's electricity exports to the US
A Reuters analysis of the products listed for new tariffs under Trump's plan would subject a wide range of imported automotive and tractor parts, metal furniture, construction materials and machinery parts to the tariffs.
Trump's action, first ordered last month to strengthen the Section 232 national security tariffs on steel and aluminum imposed during his first term, extends the duties to products as diverse as stainless steel sinks, gas ranges, air conditioner evaporator coils, horseshoes, aluminum fry pans and steel door hinges.
Total 2024 import value for the 289 product categories came to US$147.3 billion with nearly two-thirds aluminum and one-third steel, according to Census Bureau data retrieved through the US International Trade Commission's Data Web system.
By contrast, Trump's first two rounds of punitive tariffs on Chinese industrial goods in 2018 during his first term totaled only US$50 billion in annual import value.
The tariffs will hit over US$25 billion worth of imported aluminum components for cars, trucks, buses, tractors and specialty vehicles, and US$15 billion worth of metal furniture and parts imports, the analysis showed.
Canada and Mexico, the two largest sources of the metals imports, would be the hardest hit. The two biggest US trading partners also are battling separate, 25 per cent duties on all products imposed in Trump's drive to eradicate fentanyl trafficking. Those are largely paused for goods compliant with the US-Mexico-Canada Agreement on trade's rules of origin. Steelmakers and aluminum producers have long argued that the proliferation of exemptions and quotas eroded the effectiveness of his first-term Section 232 tariffs imposed in 2018, which gave a temporary lift to US steel and aluminum capacity use.
"These are not the steel and aluminum tariffs of the last time," said Dan Ujczo, a trade lawyer specializing in US-Canada trade matters. "These are the very products that consumers will feel on the shelves, in the construction industry in particular, and automotive."
Ujczo, senior counsel at Thompson Hine in Columbus, Ohio, said some of the firm's real estate clients are putting development projects on hold because they cannot accurately estimate materials costs over the next six to 12 months due to tariff uncertainty. Trump's goals in imposing the metals tariffs are to strengthen steel and aluminum production and bring more manufacturing and jobs to US shores. They are part of an onslaught of tariff actions in his first weeks in office that will culminate in reciprocal tariffs on April 2 that aim to match other countries' tariff rates and counteract their non-tariff trade barriers.
WEIGHING PRICE HIKES But equipment manufacturers in Wisconsin say the new metals tariffs may simply raise costs because much of the supply base for small metal components has moved offshore. Several say they are weighing price hikes.
Husco, a Waukesha, Wisconsin-based maker of hydraulic components for automotive and construction equipment, buys steel domestically but will see cost increases across its supply chain, especially for smaller imported components like machined steel parts, said CEO Austin Ramirez.
The firm began moving some work out of China after Trump slapped tariffs on Chinese industrial goods in 2018, but this would be difficult for components with high labor content due to US wage costs, he said.
"The more dominant impact will be higher cost on our inputs," Ramirez said, adding that for many parts, even paying 25 per cent tariffs would still be cheaper than trying to set up domestic production or trying to find US suppliers, he said.
Farm equipment manufacturers would likely announce price hikes within a week or two, as the tariffs would likely boost domestic steel prices, said Kip Eideberg, head of government relations for the Association of Equipment Manufacturers.
Midwest hot-rolled steel futures prices have risen more than 21 per cent, or US$166 a ton, to US$925 since Trump announced the tariff revisions.
"If it's 8 per cent more expensive to build tractors and combines in the US, some of that inevitably, unfortunately will be passed down to the customers," Eideberg said.
METALS RESHORING
Whether Trump's tariffs will bring metals work back or make some US manufacturers less competitive with global peers is an open question.
But Alan Price, a lawyer who leads Wiley Rein's trade practice in Washington, said they could help counteract policies such as Mexico's IMMEX program, which allows foreign companies, including US manufacturers, to import components duty-free into Mexico for assembly into finished products for export to the United States.
"Certainly, extending (tariffs) to these downstream products closes additional loopholes and reduces the attractiveness of shifting production outside the US," Price said, adding that the tariffs would also incentivize manufacturers to use more US-produced steel and aluminum. Unlike with the fentanyl-related tariffs, Trump has shown no sign of easing up ahead of the midnight deadline. He was expected to hear tariff concerns from top US corporate CEOs on Tuesday afternoon.
The White House declined comment on potential cost increases from the tariffs, which it said were an extension of Trump's first-term America First economic agenda to rebuild the US industrial base, cut taxes and increase American energy production.
"In his second term, President Trump will again use tariffs to level the playing field for American workers and reignite America's industrial might," White House spokesperson Kush Desai said in a statement.
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