Trump Administration Imposes 50% Tariffs on 400+ Steel, Aluminum Products

The Trump administration has significantly expanded the scope of tariffs on steel and aluminum products, imposing a 50% tariff on over 400 product categories. This move, effective from this Monday, covers a wide range of products, including fire safety equipment, machinery, construction materials, and specialty chemicals containing or made from steel and aluminum. This expansion is seen as a major shift in U.S. trade policy, with potential far-reaching impacts on inflation and supply chains.

The new tariffs cover a broad spectrum of items, from automotive parts and chemicals to plastics and furniture components. The expansion is not just about increasing tariffs but also represents a strategic shift in the regulation of steel and aluminum derivatives. The U.S. Department of Commerce highlighted that this measure covers 407 new product categories, aiming to close loopholes and support the ongoing revival of the U.S. steel and aluminum industries. However, the new tariff list, defined solely by customs codes, makes it difficult for the public to grasp the full extent of the affected products.

Experts anticipate broad impacts. The current steel and aluminum tariffs already cover at least 320 billion dollars in imported goods, further exacerbating inflationary pressures in the U.S. Producer Price Index (PPI). Meanwhile, a rating agency assessed that the substantial fiscal revenue generated by the Trump administration's broad tariff policies will "significantly offset" the fiscal revenue reduction caused by recent major tax cuts and spending reductions. The U.S. long-term sovereign credit rating was maintained at AA+ and the short-term rating at A-1+.

However, the rating agency warned that if the U.S. deficit continues to widen over the next two to three years and the government fails to control spending growth or reasonably address the fiscal gap caused by tax cuts, the rating could be downgraded. The agency also cautioned that political factors weakening U.S. institutional resilience, the independence of the Federal Reserve, and the effectiveness of long-term policies could even shake the status of the dollar as the world's primary reserve currency.

Since returning to the White House in January, Trump has relied heavily on high tariffs to drive his trade agenda. In July, the "Big and Beautiful" bill came into effect, reducing some federal spending while significantly cutting taxes. The Congressional Budget Office estimated that this bill would increase the federal deficit by 3.4 trillion dollars from 2025 to 2034, with a 4.5 trillion dollar reduction in revenue partially offset by 1.1 trillion dollars in spending cuts.

Despite this, the Trump administration's tariffs have significantly increased fiscal revenue. The U.S. Treasury Department reported that customs tariff revenue in July increased by nearly 21 billion dollars compared to the same period last year, although the federal budget deficit still widened by about 20%.

The rating agency noted in its report that its outlook remains stable due to expectations that the U.S. economy will continue to show resilience, and Federal Reserve policies will remain effective. Although the fiscal deficit is high, it is not expected to worsen. The agency pointed out that the strong growth in tariff revenue in the future will significantly offset the fiscal pressure brought by tax cuts and new spending.