The Trump administration is changing how it assesses tariffs on imported steel, aluminum, copper, and products containing those metals in order to simplify the process.
Thursday’s changes were announced on the one-year anniversary of President Donald Trump’s so-called “Liberation Day,” when he unveiled “reciprocal tariffs” on imports from around the world. These metals tariffs, however, were placed under a different law, Section 232 of the Trade Expansion Act of 1962.
Policy experts said the latest changes are likely in response to the pushback from U.S. importers and foreign trading partners that the administration has received over its tariffs, and evidence that the promises Trump made last April did not materialize.
The administration’s 50% tariffs still apply to imported products made entirely of the metals, such as steel coils and aluminum sheet. But other products, like washing machines, that contain a significant amount of the metals will be subject to a 25% flat tariff.
Before, an importer would have to calculate the amount of the tariff due based on how much metal was in the product and then apply separate tariff rates to the item’s remaining components.
In another change, products containing less than 15% of the metals by weight will not be assessed an additional metals tariff. Metal-intensive industrial equipment and electrical grid equipment will pay a 15% rate through 2027, and products made abroad but “entirely with American steel, aluminum, and copper” will be subject to 10% tariffs.
The White House also said the 50% tariffs would be applied to the full value of the steel and the other metals imported to the U.S. and paid for here.
This is to remedy a pricing imbalance, a senior administration official told reporters on background. After the U.S. announced its tariffs on imported steel and aluminum last year, exporters “dramatically dropped” the value of those metals to lower the amount of tariffs that would be charged on them. “They were just artificially making it lower,” the administration official said.
“We did not receive the tariff revenue we expected” because exporters were “artificially” reducing the value of the metals coming into America, the official said.
The White House said that the changes were “not driven by the desire to increase tariff revenue,” but to “better align incentives to what we are trying to accomplish while reducing needless complexity.”
Trump said last year that his tariffs would lead to an economic boom, generate trillions of dollars in revenue, spur foreign investment and domestic manufacturing, and eliminate trade deficits.
“The best thing you can say about them is that they weren’t as harmful people thought they would be,” said Scott Lincicome, the vice president of general economics at the Cato Institute in Washington, D.C.
Instead, what happened is that “taxes, prices uncertainty, and bureaucracy climbed, while U.S. manufacturing, FDI [foreign direct investments], and the trade balance stood still,” Lincicome and other Cato Institute scholars said.
Trump said at the time that there would be “no exceptions, no deals, no loopholes,” and yet tariff rates like the 130% imposed on Chinese imports were reduced, exemptions proliferated, lobbying skyrocketed, and prices for Americans rose, Lincicome told Barron’s.
The way the administration imposed its tariffs–unilaterally, negotiating different rates for different countries, often changing what products were exempt from tariffs–dramatically increased trade complexity and uncertainty. “There’s no sign of any boom,” Lincicome said.
Aluminum and steel prices in the U.S. were already twice as expensive as they were on the world market, and the U.S.-Israeli war in Iran “just made everything worse,” Lincicome said. Not only has the war caused global prices to increase, but it has cut off U.S. manufacturers’ access to aluminum sources in the UAE and Bahrain.
Write to Janet H. Cho at janet.cho@dowjones.com