US to Overhaul Metal Tariffs, Hitting Finished Goods With 25% Rate

The US is preparing to overhaul its steel and aluminum tariff regime by applying a 25% duty to finished products made with the metals, a shift from the current policy that could be announced as soon as this week.

The expected presidential proclamation would replace the existing 50% tariff that applies only to the value of the raw metal inputs for many products, according to people with knowledge of the plans cited by The Wall Street Journal.

Under the new structure, the 25% tariff will apply to the total sales price of imported finished goods containing steel and aluminum. However, the 50% tariff on commodity-grade steel and aluminum itself will remain unchanged, maintaining pressure on raw material imports.

This policy aims to simplify compliance but is expected to effectively raise costs for a wide range of imported goods, from bicycles to appliances. The change could impact manufacturers who rely on imported components and potentially lead to higher prices for American consumers.

The adjustment follows years of complex tariff application and is seen as a move to close loopholes that allowed some finished goods to enter the US without facing the steep metal tariffs. The consequences of the tariff changes will vary widely depending on the product and its composition of foreign versus domestic steel and aluminum.

Domestic steel producers may benefit from increased demand, while industries that use imported finished goods could face significant cost pressures, potentially affecting sectors like automotive, construction, and consumer goods.

This article is for informational purposes only and does not constitute investment advice.