Trump administration adds to Section 232 steel-derivatives list
The US has identified more downstream manufactured products that will be subject to Section 232 tariffs on imports of steel or aluminium derivative goods, Kallanish learns from the Federal Register.
Effective Monday, the US Department of Commerce added 407 codes to the Harmonized Tariff Schedule of the US (HTSUS) list of derivative products. The steel and aluminium portions are subject to the Section 232 tariff rate, whilst the non-steel and non-aluminium content will be subject to a reciprocal tariff rate. The steel content in the imports will be charged a 50% tariff.
US domestic steel interests applaud the development by President Donald Trump’s administration.
“The Steel Manufacturers Association (SMA) congratulates President Trump and the Department of Commerce on a robust inclusions process identifying additional steel-containing products to be covered by the steel tariffs,” SMA president Philip K. Bell comments in a statement Monday. “The steel tariffs are necessary for the national security that a strong steel industry provides.”
Ohio-based steelmaker Cleveland-Cliffs notes the inclusion of electrical steel laminations and cores, as well as certain stainless steel automotive exhaust parts to the list of derivative products.
“Cleveland-Cliffs thanks President Donald Trump and Secretary of Commerce Howard Lutnick for taking decisive and concrete action that will deter tariff circumvention occurring in plain sight with stainless and electrical steel derivative products,” Cliffs president and chief executive Lourenco Goncalves says in a press release. “Since we acquired AK Steel Corporation a few years ago, we have identified and denounced circumvention schemes through Mexico and Canada involving derivative products using steel melted and poured outside of North America. This practice, which has been accepted and supported by both Canada and Mexico — despite its inherent conflict with the original intent of the USMCA trade agreement — has ultimately turned into a blatant tariff evasion subterfuge.”
The Cliffs ceo adds that the new measures provide certainty that the American domestic market will not be undercut by unfairly traded steel within the derivative products. This allows the company to continue investment in its stainless steel and electrical steel operations.
The American Iron and Steel Association (AISI) also credits the Trump administration’s efforts, emphasising military readiness.
“A healthy domestic steel industry is vital to our national defence,” states AISI president and chief executive Kevin Dempsey. “The Section 232 program recognises that steel is essential for military equipment, critical infrastructure and emergency response needs. Strengthening these tariffs helps ensure that America is not reliant on foreign imports in times of national security threats and crises.”
Six months ago, the Trump administration began compiling derivative steel items to add to Section 232 tariffs because of increased imports of certain articles that depressed demand for goods produced by domestic steel mills. Examples include welded angles, shapes and sections of iron or steel; bridges and bridge sections of iron or steel; grill, netting and fencing of iron or steel wire; parts for agricultural, horticultural or forestry machinery; modular building units of steel, and prefabricated buildings.
John Isaacson USA
Uncertainty over new tariffs ‘killing’ US steel demand
President Trump’s announcement of potential new tariffs that exceed the initial “reciprocal” rates unveiled on April 2’s Liberation Day has increased uncertainty in the US steel market and the risks to global trade.
Brazil, Canada, the EU and Mexico have received notice that their tariffs could increase further unless trade talks progress ahead of the new August 1 deadline. These “reciprocal” tariffs cannot be applied to US steel imports on top of the existing Section 232 tariffs. However, higher baseline tariffs would raise the cost of US steelmakers’ raw materials, applying upward pressure to steel prices and increasing uncertainty among steel buyers in a climate of low demand.
MEPS US steel market analyst, Laura Hodges, said: “There is not a lot of good news for US steel buyers right now. Interest rates remain high, activity remains cautious and the latest tariff announcements only acerbate this situation.
“We continue to hear from MEPS respondents that it is impossible to plan in this uncertain environment. This ‘wait and see’ approach is killing steel demand.”
Tariff threats aim to accelerate trade talks
Trade negotiations have been slower than the US government anticipated. Originally, a July 9 deadline was set, after which country-specific reciprocal tariffs above a 10% base rate would take effect. Last week, this deadline was extended to August 1.
To accelerate talks, the US government has issued letters outlining new baseline tariff rates to over 20 countries and the EU. Brazil’s rate was raised to 50%, while the EU now faces a 30% tariff, up from 20%, if progress is not made in trade negotiations. Tariffs on Mexico and Canada were increased to 30% and 35% respectively, though these apply only to good that do not comply with the United States-Mexico-Canada Agreement.
So far, only two preliminary trade deals have been announced, with the United Kingdom and Vietnam. Of these, only the UK agreement has been formally communicated, and parts of that deal are now at risk. The UK secured a lower 25% tariff on steel imports into the US. However, this exemption was linked to conditions that must be met by the country’s government by the July 9 deadline. No formal announcement has yet been made and there remains a risk that US tariffs on UK steel imports could revert to the full 50% Section 232 rate.
“Reciprocal” tariffs’ influence on US steel sector
While not directly applicable to steel imports, higher baseline “reciprocal” tariffs could affect US steel demand in several ways. Section 232 tariffs do not cover steelmaking raw materials such as scrap, pig iron and DRI. However, these inputs remain subject to the “reciprocal” tariffs which currently sit at 10% for most countries. Brazil supplies about 30% of total US imports of these materials. If its baseline tariff rises to 50%, it will increase production costs and could weaken downstream demand.
Persistent uncertainty continues to weigh on steel buyers, who have largely stayed on the sidelines, in 2025, as they await clarity on US trade policy.
Against this backdrop of lacklustre demand, respondents to MEPS’s research for its International Steel Review indicate that steel prices have shown limited upward momentum since the doubling of the Section 232 tariff to 50% on June 4. The July contract price for hot rolled coil on the Chicago Mercantile Exchange (CME) reflects this. Having jumped from USD801 per short ton on May 30 to USD923 on June 4, prices have since dropped by almost USD50 per short ton.
With less than three weeks until August 1, the scarcity of finalised trade deals suggest the possibility of yet another extension, prolonging uncertainty and keeping demand sluggish. The likelihood that the 50% Section 232 tariff might be reduced through these negotiations also appears to be decreasing.
US delays reciprocal tariffs deadline to August 1
The US has postponed its previously announced deadline for imposing country-specific reciprocal tariffs, extending it from July 9 to August 1, according to several media reports.
This decision has provided a short but significant window for US trading partners such as Japan, South Korea, and the EU to finalize trade agreements that could soften or eliminate the planned tariffs. The delay is seen as a diplomatic move that may reduce trade tensions and foster ongoing negotiations – especially with the EU, which has warned of retaliatory countermeasures should talks fail.
Recently, the US sent letters to 14 countries, including Japan and South Korea, announcing new reciprocal tariffs of up to 40 percent, in addition to existing sector-specific tariffs on steel and automotive products, as SteelOrbis previously reported.
The US has already secured deals with the UK, China, and Vietnam, signaling a pattern that may encourage others to come to the table before the August 1 deadline.
US court overrules reciprocal tariffs; Section 232 duties remain in place
In a court ruling issued late Wednesday, May 28, Trump’s reciprocal tariffs, imposed on “Liberation Day” on April 2, and the 25% ad valorem duties imposed on Mexico and Canada and 10% duties on China were overturned.
Trump justified the tariffs under the International Emergency Powers Act of 1977 (IEEPA). But “the court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder,” the ruling said.
“Any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional,” the court added.
“The court holds for the foregoing reasons that IEEPA does not authorize any of the Worldwide, Retaliatory, or Trafficking Tariff Orders,” the ruling concluded. “The challenged Tariff Orders will be vacated and their operation permanently enjoined.”
The decree “has had a positive impact on global markets and by extension US sentiment,” a US-based source told Fastmarkets.
But the 25% tariffs on steel and aluminum, which went into effect on March 12, remain in place.
Some market participants remain frustrated with the tariffs.
“All we can do is wait and see,” a distributor and former auto buyer told Fastmarkets, who believes that Trump will appeal to the Supreme Court to overturn the ruling and allow reciprocal tariffs to go into effect.
Another source said they “are not feeling anything different” about the tariffs.
The Trump administration has already challenged the court’s overruling. The administration filed a notice of appeal to the Court of Appeals for the Federal Circuit on May 28 following the decision.
Financial markets reacted positively to the news. The Dow Jones Industrial average surged by over 500 points in the futures market on the news but fell back to a modest gain after the market opened at 9:30am.
The S&P 500 saw modest gains in the wake of the ruling, while Nasdaq rose significantly. Both indexes have since fallen.
The US dollar surged following the ruling but quickly lost the gains made, according to the US Dollar Index.
Robert England in Delaware, Amy Hinton and Daniel Hillard in Pennsylvania contributed to this story.
Kloeckner remains unconcerned about US tariffs
Steel distribution group Klöckner & Co feels relatively immune to the impact of tariffs imposed by the US government, its chief executive Guido Kerkhoff said during a conference call on Wednesday.
The Germany-based group has operations in the USA as well as Mexico, which together make up a larger share of revenue than Klöckner’s European operations, in Germany and Switzerland. For its US sites, Klöckner sources 97% of product tonnage from US mills. Hence, “the penalty duties affect us only indirectly, if our customers are affected,” Kallanish heard from Kerkhoff. The firm’s pricing is not affected at all, he added.
Given the US government’s target of near-shoring the manufacturing industry, Klöckner’s local business range would in fact grow bigger. “We are a local player, after all,” Kerkhoff maintained.
Regarding the company’s warehouses in Mexico, 45% of the material can be sourced within Mexico, and another 25% is sourced from the USA. “Our sites are approved by the USMCA [United States-Mexico-Canada Agreement], so that we can enter the US market,” he explained. Many of Klöckner’s competitors, but also customers like some carmakers, are much more dependent on sourcing from overseas, he noted.
The company recently completed the acquisition of Haley Tool & Stamping near Nashville, Tennessee. The move expands Klöckner’s manufacturing capabilities with the addition of stamping presses, allowing it to leverage operational synergies across its locations in the region.
Christian Koehl Germany
Tariffs on Canada, Mexico definitely start Tuesday
Indicating that the time for negotiations on tariffs with Canada and Mexico is over, US President Donald Trump on Monday said he will proceed with the 25% tariffs on the two countries on Tuesday, Kallanish discovers from the White House press briefing.
Trump told reporters that there is no room for Canadian or Mexican officials to negotiate a reprieve from the levies.
“Tariffs, 25% on Canada, and 25% on Mexico … will start tomorrow,” Trump confirmed during the press gathering. “So they’re going to have a tariff, and what they have to do is build their car plants, frankly, and other things, in the United States, in which case you have no tariffs.”
Mexican President Claudia Sheinbaum on Monday said she was waiting for Trump to make a decision about tariffs and that she might talk with him before the deadline. “Everything is possible,” she said.
John Isaacson USA
US manufacturers confirm steel tariff-driven operational impediments
Operational upheaval caused by the recent bloat in US domestic steel prices and government tariff policies is seen as detrimental to various US businesses reliant on steel, Kallanish reports.
US farm equipment manufacturers, fabricators and automakers contend that President Donald Trump’s trade measures will impede growth and productivity in their respective industries.
Agriculture and construction equipment advocacy group Association of Equipment Manufacturers (AEM) unequivocally renounces any perceived benefits to those two sectors. Any significant increase in steel prices has a ripple effect, and the cross-border nature of steel and agricultural commodities and inputs means that everyone in the supply chain would be hit with higher costs, AEM argues.
“The fact remains: Tariffs are a tax paid by Americans, and their broad-based application will stifle economic growth and undermine the competitiveness of the United States,” AEM senior vice president Kip Eideberg says in a statement.
A Northern California-based agriculture original equipment manufacturer (OEM) tells Kallanish that the complications involved with the tariffs are farther-reaching than he initially expected. His projected growth plan for the business may be stifled.
“When everyone starts panic buying and we can’t get quotes on steel that’s already like 20% higher than when I quoted my customers, there’s no choice but to get steel and pay the tariffs. Some of the components and parts we use are only made outside the US, so that will cost more than before too,” the OEM owner comments. “That raises base product prices on machines that are six-figures, plus if I go to export a machine, it’s gonna cost a Canadian customer even more. Why wouldn’t someone just open their own business there? These machines should last more than 30 years, so how many am I gonna sell in just the US?”
Service centres and distributors across the US note that most domestic flat-steel mills closed order books and pushed lead times into in April. Nucor’s published price for hot-rolled coil has shot up to $820/short ton, an increase of $70/st just since early January. SSAB Americas increased all steel prices by a minimum of $100/st last week. On Friday, Cleveland-Cliffs increased its HRC base price to $900/st after maintaining a consistent $800/st level since December.
Service centres seem “a little apocalyptic,” states the co-owner of an Oregon-based custom metal fabrication studio focused on structural and ornamental steelwork for residential and commercial projects.
“We already changed our agreements to five-day guarantees because that’s all our reps guarantee us. We have to charge a lot for the jobs we do and now customers don’t know if they want to pause or try to book us now and hope they can still afford the job when it comes time to start. It can take more than five days for them to even decide. Now, if I can’t even get steel, I don’t know what we will do. It’s very stressful. If we shut down then that’s less steel sold to anyone. Probably isn’t what anyone thought was going to happen but that is what will happen to us,” says the fabricator.
US automakers including Ford Motor and General Motors (GM) have voiced concerns about increasing costs to manufacturing and the uncompetitive pricing they may be forced to impose on consumers. At an automotive conference last week, GM chief financial officer Paul Jacobson floated the potential of relocating some of the company’s facilities.
“Those are questions that just don’t have an answer today, because (what) I can tell you is, as much as the market is pricing in a big impact of tariffs and lost profitability, we think about a world where on top of that, we’re spending billions of dollars in capital. So we can’t be whipsawing the business back and forth,” Jacobson stated bluntly.
Kristen DiLandro USA
Trump adds downstream goods to steel tariff order
The Trump administration is singling out a list of 167 “derivative” steel items destined for addition to Section 232 tariffs in the US, Kallanish learns from a White House proclamation on Tuesday.
A few examples of the downstream articles are welded angles, shapes and sections of iron or steel; bridges and bridge sections of iron or steel; grill, netting and fencing of iron or steel wire, plated or coated with zinc; parts for agricultural, horticultural or forestry machinery; modular building units of steel, and prefabricated buildings.
Increasing imports of certain derivative steel articles have depressed demand for goods produced by domestic steel producers, Trump argues. He says it is necessary to adjust the tariff to apply to the additional downstream goods. The presidential proclamation says the derivative steel articles may be subject to an additional 25% ad valorem rate of duty. The Secretary of Commerce now has 90 days to establish a process for including additional derivative steel articles within the scope of the duties.
“Section 232 … authorises the president to take action to adjust the imports of an article and its derivatives if the president concurs with the Secretary of Commerce’s finding that the article is being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security,” the document states.
Tuesday’s proclamation includes an annex that lists the 167 goods by their numbers in the Harmonized Tariff Schedule of the United States.
“Except as otherwise provided in this proclamation, all imports of derivative steel articles specified in Annex I to this proclamation or in any subsequent annex to this proclamation, shall be subject to an additional 25% ad valorem rate of duty, with respect to goods entered for consumption, or withdrawn from warehouse for consumption,” adds the presidential order.
The document states that the initial 25% tariff imposed in March 2018 has been an effective means of reducing imports, encouraging investment and expansion of production by domestic steel producers, and minimised the threat to US national security. Following the initial imposition of 25% tariffs, the US steel capacity utilisation rate increased to above 80%. Recently, the utilisation rate has been 74-75% (see separate story).
Some producers in other countries allegedly have evaded the measures, processing covered steel articles into additional downstream steel derivative products that were not included in the additional tariffs proclaimed in January 2020.
John Isaacson USA
Trump will impose 25% tariffs on Steel and Aluminum
The US president said he planned sweeping tariffs on all steel and aluminum imports on Monday and would take other action to even out tariff rates with the rest of the world later this week.
Donald Trump has said he will announce new 25% tariffs on all steel and aluminum imports into the US on Monday that would affect “everybody’, including its largest trading partners Canada and Mexico, in another major escalation of his trade policy overhaul.
Trump’s pre-announcement came as China’s retaliatory tariffs, announced last week, came into effect. The measures target $14bn worth of products with a 15% tariff on coal and LNG, and 10% on crude oil, farm equipment and some vehicles.
The US president, speaking to reporters on Air Force One on Sunday, also said he would announce reciprocal tariffs – raising US tariff rates to match those of trading partners – on Tuesday or Wednesday, which would take effect “almost immediately”. “And very simply, it’s, if they charge us, we charge them,” Trump said of the reciprocal tariff plan.
The move on steel and aluminum brought a swift reaction from Doug Ford, the premier of the Canadian province of Ontario, who accused the US president of “shifting goalposts and constant chaos” that would put the economy at risk.
Monday’s tariffs would come on top of existing metals duties.
Amid wider pushback against Trump’s economic heavy-handedness, French President Emmanuel Macron warned in an interview broadcast on Sunday that he was willing to go “head-to-head” on tariffs with the US president. “I already did so, and I will did (sic) it again.”
Macron told CNN that the EU should not be a “top priority” for the US, saying: “Is the European Union your first problem? No, I don’t think so. Your first problem is China, so you should focus on the first problem.”
Macron said tariffs would harm European economies but also the US, given the level of economic ties. “It means if you put tariffs on a lot of sectors, it will increase the costs and create inflation in the US. Is it what your people want? I’m not so sure,” he said.
He said the EU must be ready to react to US actions, but stressed that the 27-nation bloc should mainly “act for ourselves”. “This is why, for me, the top priority of Europe is competitiveness agenda, is defence and security agenda, is AI ambition, and let’s go fast for ourselves.
“If in the meanwhile, we have [a] tariff issue, we will discuss them and we will fix it.”
Trump has long complained about the EU’s 10% tariffs on auto imports being much higher than the US car rate of 2.5%. He frequently states that Europe “won’t take our cars” but ships millions west across the Atlantic every year.
US extends rebar AD order on 7 nations, including Poland and Latvia
The US International Trade Commission (ITC) has ruled that antidumping duties on imports of rebar from seven nations should not be removed, Kallanish discovers in a federal document.
“Revocation of the antidumping duty orders on rebar from Belarus, China, Indonesia, Latvia, Moldova, Poland and Ukraine would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time,” the ITC writes in a notice circulated Thursday.
The latest determination is a result of a fourth round of five-year sunset reviews.
After the prior review in 2018, the Department of Commerce issued average dumping margins of 114.53% for Belarus, 133% for China, 71.01% for Indonesia, 16.99% for Latvia, 232.86% for Moldova, 52.07% for Poland and 41.69% for Ukraine. Commerce’s case originated in 2001.
The AD order includes all steel concrete reinforcing bars sold in straight lengths. Excluded are plain round bars and processed rebar that has been bent or coated.
Dom Yanchunas USA
