U.S. hikes steel, aluminum tariffs on imported appliances, railcars, EV parts

The U.S. Commerce Department announced on Tuesday that it will be increasing tariffs on over 400 products made of steel and aluminum. This includes a wide range of items such as wind turbines, mobile cranes, appliances, bulldozers, railcars, motorcycles, marine engines, furniture, and more.

According to the department, 407 product categories will now be subject to these tariffs, which will be set at 50 per cent of the steel and aluminum content of the products, in addition to the country rate on the non-steel and non-aluminum content. This move is expected to impact over $200 billion in imports from last year and is estimated to raise the overall effective tariff rate by around one percentage point, as per Evercore ISI.

In addition to the products mentioned, imported parts for automotive exhaust systems, electrical steel for electric vehicles, components for buses, air conditioners, and appliances like refrigerators and freezers will also be affected by the new tariffs. Foreign automakers have expressed concerns about the U.S. not having enough domestic capacity to meet the current demand for these parts.

Tesla, a prominent electric vehicle manufacturer, had requested the commerce department to exclude steel products used in electric vehicle motors and wind turbines from the tariffs, citing a lack of U.S. capacity to produce such steel. However, their request was denied.

The new tariffs are effective immediately and will also cover compressors, pumps, and the metal in imported cosmetics and personal care packaging. Under Secretary of Commerce for Industry and Security, Jeffrey Kessler, stated that these actions are intended to prevent circumvention of the tariffs and support the American steel and aluminum industries.

Steelmakers, including Cleveland Cliffs, had pushed for the expansion of tariffs to include additional steel and aluminum auto parts. This decision marks a further step in the government’s efforts to protect domestic industries and promote American manufacturing.