U.S. President Donald Trump will apply a preferential 10% tariff to foreign equipment and machinery containing at least 85% U.S.-made steel and aluminum, in a move aimed at boosting domestic metal usage. The decision has drawn attention to whether Hyundai Steel and POSCO, which are pursuing a steel mill in the United States, could benefit.
The White House said Monday, local time, that Trump signed a proclamation adjusting tariffs on imports of steel, aluminum and copper.
According to the proclamation, products from foreign companies that use U.S.-made steel and aluminum accounting for at least 85% by weight will be eligible for the preferential 10% tariff rate. The White House said the measure is intended to encourage foreign companies to use U.S. metals.
Tariff cuts were also made to spur investment in U.S. manufacturing and agriculture. Tariffs on agricultural equipment such as combines and harvesters, along with some other equipment, will be reduced to 15% from 25%. The scope of industrial equipment subject to the existing 15% tariff has also been expanded, so that mobile industrial equipment such as bulldozers and forklifts imported from countries with trade agreements will be subject to the same rate. The tariff adjustment will be applied on a temporary basis through December 31, 2027.
The move has drawn attention to the steel mill that Hyundai Motor Group and POSCO Group are jointly pursuing in Louisiana. The two companies signed a memorandum of understanding in April on mutual cooperation in the steel and secondary battery materials sectors and are pursuing the construction of a $5.8 billion (about 8.8 trillion won) steel mill in Louisiana. However, the Louisiana mill is targeting commercial production in 2029, meaning benefits could be expected if the latest measure is extended or made permanent.
Meanwhile, the Trump administration said it would also pursue retaliatory tariffs on Brazil. The Office of the U.S. Trade Representative (USTR) said Monday it would pursue a 25% retaliatory tariff under Section 301 of the Trade Act in response to Brazil's unfair trade practices. However, some items, including beef, coffee, rare earths, other metals and aircraft parts, were excluded from the retaliatory tariffs, Reuters reported.
Trump had previously imposed a 50% tariff on Brazilian products by invoking the International Emergency Economic Powers Act (IEEPA) as a retaliatory measure against the leftist Lula government's indictment of hard-right former President Jair Bolsonaro. However, that tariff was ruled unlawful by a U.S. court in February, and the Trump administration is pursuing a plan to impose new tariffs on major countries by invoking Section 301 of the Trade Act.
