Trump Expands 50% Tariffs on Steel, Aluminum to Household Appliances

The United States government, under the administration of Donald Trump, is advancing another round of tariff measures. These actions are seen by some trade experts as more legally sound than the country-specific tariff rates previously imposed, potentially having a similarly broad impact on imports.

The U.S. Department of Commerce is expected to release the results of investigations into several industries deemed critical to national security within the coming weeks. These industries include semiconductors, pharmaceuticals, and key minerals. It is widely anticipated that these investigations will lay the groundwork for tariffs on a multitude of foreign products in these sectors.

Trump has already implemented tariffs on steel and aluminum imports under the authority of Section 232 of the Trade Expansion Act in 2018. Recently, the scope of these tariffs has been expanded to include consumer goods containing these metals.

The latest move under Section 232 involves the Department of Commerce announcing an expansion of the 50% tariff on steel and aluminum products to include household appliances such as dishwashers, dryers, and washing machines. According to the legal basis for these tariffs, all these products are considered essential to national security.

The remaining seven ongoing investigations are expected to follow a similar approach. For instance, Trump has pledged to impose tariffs on smartphones if companies like Apple and its competitors do not manufacture their products in the United States.

U.S. businesses can petition the government to include domestically produced goods in the Section 232 tariff list. This year, Trump's steel and aluminum tariff list already includes items such as fitness equipment, coat hangers, and door thresholds.

When the World Trade Organization ruled last month that Trump's retaliatory tariffs were illegal and must be revoked, businesses and trading partners breathed a sigh of relief. These retaliatory tariffs, announced on April 2, were implemented under the International Emergency Economic Powers Act (IEEPA).

Even if the IEEPA pathway for implementing tariffs is blocked by the courts, the relief may be temporary. The administration's use of Section 232 to impose tariffs could effectively replace the retaliatory tariffs that have faced legal scrutiny and hindered U.S. trade negotiations with allies and adversaries alike.

Some government officials believe that Section 232 tariffs can serve as a more effective substitute for the retaliatory tariffs, which have drawn legal challenges and impeded trade agreement negotiations with both allies and adversaries.

The administration's actions under Section 232 are evolving into a near-global tariff measure. These actions could potentially subject almost all goods entering the United States to import restrictions, with the scale and scope of these restrictions being substantial.

Trump, during his return from the G7 summit, stated that pharmaceutical tariffs would be implemented "soon," encouraging companies to shift production back to the United States. He noted that this would incentivize most companies, at least to some extent, to return to the U.S.