The Trump administration is expected to unveil a revamped tariff plan that imposes a flat 25% duty on all finished goods containing imported steel and aluminum. Industry observers warn that the shift in the tax base from raw metal value to finished product prices could increase the actual tax burden.
The Wall Street Journal reported on Thursday, citing sources, that President Donald Trump plans to sign a proclamation as early as this week changing the tariff assessment basis to the total price of finished products containing steel or aluminum. The move replaces the current system, which calculates the value of steel or aluminum embedded in each product and levies a 50% tariff accordingly.
However, raw-material-grade products predominantly composed of steel or aluminum will continue to face the existing 50% tariff. Some items with high metal content may also be reclassified as raw materials.
The overhaul is aimed at simplifying the complex tariff structure. "The administration considered a three-tier tariff system earlier this year but ultimately opted for a simpler approach," the WSJ reported.
Although the tariff rate appears to have been cut on the surface, analysts point out that the actual burden is likely to increase. Under the previous system, duties were assessed based on the raw material value proportional to metal content, but the new framework applies the rate to the entire finished product price, raising the assessable value. As a result, US tariff revenue is also expected to grow.
During his first term in 2018, Trump imposed tariffs of 25% on imported steel and 10% on aluminum, but those duties applied only to raw metals. US industry later criticized the policy for driving up metal prices while allowing finished steel and aluminum products to bypass tariffs. After returning to the White House last year, Trump extended tariffs to finished goods such as screws, furniture, and auto parts, and raised the rate to 50% in June last year.