President Donald Trump announced new proclamations on February 10 imposing 25% tariffs on imports of steel and aluminum products, including aluminum castings, from all countries without exception, rolling back exemptions for Canada, Mexico, the EU, UK, Japan, South Korea, and other allied nations.

Expansion of Section 232 Tariffs

Specifically, the proclamations increase the tariff rate on aluminum to 25% from the previous 10% rate the president enacted on June 1, 2018, and reinstate the 25% tariffs on steel that had previously been authorized but were subsequently relaxed for many countries by both the Trump and Biden administrations. 

The tariffs are being expanded pursuant to Section 232 of the Trade Expansion Act of 1962, which allows the president to impose import restrictions based on an investigation and affirmative determination by the U.S. Department of Commerce that certain imports threaten to impair U.S. national security. These new steel tariffs do not impact most iron and steel castings, which fall under the tariffs imposed separately under the Section 301 of the Trade Act of 1974.

In addition, the new tariffs also dismantle the existing product exclusion mechanism, which had previously allowed domestic importers to request tariff exemptions for steel and aluminum products deemed unavailable from U.S. sources or critical to national security interests. Effective immediately, the Department of Commerce will no longer accept new exclusion requests. 

A key highlight of the steel and aluminum tariff expansion is the termination of country-level exemptions and tariff-rate quotas (TRQs) negotiated with key U.S. trading partners under prior administrations. The Trump administration’s stated justification for terminating these arrangements centers on growing concerns over transshipment and circumvention tactics––claiming in particular that Chinese and Russian steel products are being routed through trading partners previously exempt from Section 232 duties, including Canada and Mexico. 

The proclamations also note that certain U.S. trading partners have failed to take adequate measures to prevent Chinese state-owned enterprises and other non-market actors from making strategic investments in their domestic steel and aluminum industries, thereby enabling continued penetration of non-market subsidized metal products into the U.S. market.

Effective Dates and More Potential Tariffs

As Modern Casting was going to press February 27, the metals tariffs were set to take effect on March 12––they are the latest in a slew of tariff proposals announced by the president in the first few weeks of his second term.

President Trump so far has imposed 10% tariffs on all Chinese goods, and threatened 25% tariffs on Canada and Mexico, which were put on hold until March 4. In addition, he issued a February 13 memorandum directing a rapid review process to determine country-specific “reciprocal tariffs” for U.S. trading partners based on each partner’s perceived unfair trade and economic practices. The moves are part of an aggressive push by the president to reset global trade––Trump says that tax hikes on the people and companies buying foreign-made products will ultimately strengthen domestic manufacturing.

Potential Retaliatory Measures 

The broader trade implications of these measures remain highly uncertain, particularly as key U.S. trading partners evaluate potential responses. Prior to these proclamations, the EU had suspended retaliatory tariffs on U.S. goods, including bourbon whiskey and motorcycles, as part of the 2021 U.S.-EU framework negotiations on global steel overcapacity. However, these tariffs are now expected to be reimposed, particularly given the collapse of U.S.-EU negotiations on a broader steel agreement intended to coordinate policies against Chinese excess production. Meanwhile, other major steel suppliers—including Canada, Mexico, Brazil, and Vietnam—are likely to respond with countermeasures, potentially impacting a broad range of U.S. exports.

Expansion of Tariffs to Derivative Products

The proclamation also directs the Commerce Secretary to establish a process for including additional derivative steel and aluminum articles within 90 days. Exceptions are provided for derivative steel products processed in another country that were melted and poured in the U.S. The same goes for derivative aluminum products processed in another country that were smelted and cast in the U.S.

In addition to any derivative steel and aluminum products that the Commerce Secretary adds, the process will allow for U.S. steel and aluminum producers, aluminum metalcasters, as well as industry associations representing them, to request the inclusion of additional derivative articles if they can demonstrate that rising imports of these products also threaten U.S. national security. The Commerce Secretary would have 60 days to make a determination on these requests for expanded tariff protections.

On Monday, April 14 at CastExpo, AFS is hosting an important presentation with a Washington-based trade lawyer and foundry experts who will bring metalcasters and their suppliers up to date on trade policies, tariffs, and their impact on the U.S. metalcasting industry. Meanwhile, AFS will continue to monitor developments closely and will provide additional updates.