President Trump signed a proclamation on Monday expanding the Section 232 tariffs on imports of steel and aluminum, eliminating all country exemptions and tariff-rate quotas. In response to the newly announced tariffs, the Auto Care Association stated that U.S. manufacturers will be at a competitive disadvantage in both domestic and international markets.
“The expansion of these tariffs will have far-reaching consequences beyond the steel and aluminum industries,” said Bill Hanvey, president and CEO, Auto Care Association. “Vehicle parts, along with countless other downstream industries, depend on a stable supply of raw material to create and provide the countless vehicles parts that keep our families, businesses and economy running.
“These industries are a critical part of not only the American transportation industry, but also U.S. manufacturing as a whole. Many specialty steel products used in our industry are not readily available from domestic sources, making access to global supply chains essential. U.S. manufacturers are at a competitive disadvantage, making it more difficult to compete in both domestic and international markets.”
The Auto Care Association stated it remains supportive of the Trump administration’s broader goals of achieving fair and balanced international trade relationships; expanding job creation and opportunities in the United States; and lowering the cost of living for all Americans. It urges President Trump to “consider the potential unintended and immediate consequences of these tariffs on everyday Americans and to explore solutions that protect both American businesses and consumers while advancing the goal of strengthening the American economy and workforce.”
Tariff rate, effective date
Under the new order, all imports of steel and aluminum will be subject to a 25% tariff rate, effective March 12. This represents an increase from the previous 10% tariff on aluminum. Steel products imported from Turkey will be subject to a 50% tariff rate.
Countries subject to the tariff
There are no country exemptions under the new policy. All previous Section 232 steel and aluminum country exemptions and tariff-rate quota deals with Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom have been eliminated. President Trump is considering exempting Australia from these tariffs due to Australia’s trade surplus with the United States.
According to the proclamation, the removal of country exemptions is due to significant increases in imports from previously exempted countries, which have contributed to oversupply and pricing pressures, negatively impacting U.S. domestic producers.
The largest suppliers of steel to the U.S. by quantity were:
The largest suppliers of aluminum to the U.S. by quantity were:
Exclusions
The proclamation terminates the product exclusion process which previously allowed U.S. companies to request exclusions for products not readily available from domestic sources. Additionally, previously approved product-specific tariff exclusions are also eliminated.
Downstream and derivative products
In an effort to prevent tariff evasion, the new order expands to include certain downstream products, including fabricated structural steel, prestressed concrete strand and others. Previously, some countries avoided tariffs by exporting processed steel products instead of raw steel, which allowed foreign companies to bypass U.S. protections.
Derivative steel products outside of the U.S. from steel “melted and poured” in the U.S. are not subject to the 25% tariff.
Potential retaliation
The European Union (EU) has expressed strong opposition to the newly expanded steel and aluminum tariffs calling them “unjustified” and warning that they “will not go unanswered.” While EU officials have not stated what retaliation would look like, they expressed they are ready to enact countermeasures against the United States.