US Steel and Aluminum Inclusions Process: A New Era for Trade Policy and Investment Opportunities

The U.S. Commerce Department’s 2025 announcement of its "inclusions process" under Section 232 of the Trade Expansion Act marks a seismic shift in U.S. trade policy, with profound implications for global supply chains and domestic industries. By expanding tariffs on steel, aluminum, and their derivatives—such as semiconductors, electric vehicles, and defense equipment—the administration aims to bolster national security and domestic manufacturing. This move, however, presents both challenges and opportunities for investors. Let’s dissect its economic and investment ramifications.

The Inclusions Process: A Broadening of Trade Controls

The new process replaces the previous exclusion system for tariffs on steel and aluminum, which had allowed companies to seek exemptions. As of March 12, 2025, all prior exclusions were revoked, and tariffs on steel and aluminum imports were hiked to 25%, up from 10%. Crucially, the scope now extends to derivative products—items containing steel or aluminum—such as components in electric vehicles, semiconductors, and wind turbines.

The Commerce Department’s interim final rule requires manufacturers to specify the steel or aluminum content of goods by weight, with precise Harmonized Tariff Schedule (HTS) codes. This creates compliance hurdles but also incentivizes domestic production to avoid tariffs.

Critical Minerals: The New Strategic Frontier

The inclusion of 55 critical minerals—including lithium, cobalt, and gallium—in the investigations underscores their strategic importance for high-tech and defense industries. These minerals are integral to batteries, semiconductors, and advanced weaponry. The U.S. currently relies heavily on foreign sources, particularly China, for processing and refining these materials.

The Commerce Department’s focus on supply chain vulnerabilities here is clear. For investors, this signals a push toward U.S. domestic production and partnerships with allies like Canada and Australia. Companies positioned to secure mineral resources or improve refining capacity could see long-term gains.

Trucking Industry Implications: A Sector Under Scrutiny

Medium- and heavy-duty trucks (over 10,000 lbs GVW) are now under review for their reliance on foreign parts and subsidies. The U.S. trucking industry, a backbone of logistics and defense, faces pressure to reduce dependence on imports, particularly from China and Canada.

Investors should monitor companies like Paccar (PCAR) or Navistar (NAV) for their ability to pivot toward domestic suppliers. Conversely, firms reliant on imported components may face margin pressures unless they adapt swiftly.

Compliance Challenges and Strategic Shifts

The elimination of exclusion requests forces companies to recalibrate supply chains. Manufacturers must now either:
1. Source materials domestically to avoid tariffs.
2. Re-engineer products to reduce steel/aluminum content.
3. Absorb costs, risking reduced profit margins.

The latter option is unsustainable for many, pushing industries toward innovation. For example, automakers like Tesla (TSLA) might accelerate efforts to use aluminum alloys in car frames to offset costs, while semiconductor firms could prioritize U.S.-sourced gallium.

Investment Opportunities in a Restructured Landscape

1. Domestic Mining and Refining: Companies like Albemarle (ALB) or Lithium Americas (LAC) could benefit from increased U.S. demand for critical minerals.
2. Advanced Manufacturing: Firms with strong U.S. production footprints, such as 3M (MMM) or General Dynamics (GD), may see advantages over global competitors.
3. Tariff Mitigation Tech: Startups developing lightweight materials or recycling technologies could attract capital as industries seek cost efficiency.

Conclusion: A Policy with Long-Term Teeth

The Commerce Department’s inclusions process is not a temporary measure but a structural shift. By eliminating exclusions and expanding tariffs, it forces industries to retool supply chains, favoring firms with robust domestic capabilities.

Key data underscores the urgency:
- China controls ~80% of rare earth mineral processing, per the U.S. Geological Survey.
- U.S. imports of lithium-ion batteries surged 40% between 2020–2023, per the Commerce Department.
- Electric vehicle adoption is projected to reach 30% of U.S. sales by 2030, per BloombergNEF, amplifying demand for critical minerals.

Investors ignoring this policy will face risks, while those capitalizing on domestic production, mineral sourcing, and innovation stand to profit. The inclusions process isn’t just about tariffs—it’s about reshaping the future of American industry.