President Donald Trump signed a proclamation on June 1 to amend tariffs on aluminum, steel, and copper imports in an effort to increase investment in the U.S. agriculture and manufacturing sectors. The adjusted tariffs take effect on June 8 and remain in effect through December 31, 2027. The Trump administration also proposed new tariffs of 10% and 12.5% on imports from 60 economies after determining that these tariffs did not curb trade in goods made with forced labor. Failing to address the importation of goods made with forced labor forces American workers to compete globally on an uneven playing field. Public comments on the proposed tariffs and other remedies will be accepted through July 6, with a public hearing scheduled for July 7.
Adjustments to Aluminum, Steel, and Copper Import Tariffs
Tariffs on agricultural machinery and residential heating, air conditioning, and ventilation equipment will be reduced to 15% from 25%. Two new categories of steel and aluminum derivative import products (steel racks and aluminum lithographic plates) will be subject to 25% tariffs. The existing category of industrial equipment subject to a 15% tariff will include mobile industrial equipment, such as bulldozers and forklifts, when imported from trade-deal countries entitled to such treatment. To encourage foreign companies to use more U.S. steel and aluminum, the proclamation allows them to qualify for a 10% duty rate if their capital equipment includes at least 85% U.S. melted and poured or smelted and cast steel or aluminum by weight.
New Tariffs
The Trump administration proposed new tariffs of 10% and 12.5% on imports from 60 economies because they failed to stop the imports of products made with forced labor. Despite laws banning them, the products of forced labor are deeply embedded in supply chains across the world. The new tariffs are expected to impose a 10% import tax on Mexico, Canada, the EU, Taiwan, Britain, and 9 other trade partners. These trade partners had plans or partial schemes in place, or had made commitments, to address forced labor as part of their U.S. trade agreements. The tariffs will not apply to Canadian and Mexican imports that comply with the rules of origin under the North American trade deal.
The EU has a 2024 law that bans imports of products produced with forced labor, but it does not come into force until December 2027 and lacks key elements, according to U.S. Trade Representative Jamieson Greer. According to the EU, it is committed to the trade deal sealed with the Trump administration last year. It is unclear whether the additional tariffs would exceed those agreed between both sides last July, resulting in a 15% tariff on a broad range of the EU’s exports. According to Britain, it is in regular talks with the United States and is taking action to tackle forced labor, and the preferential access to U.S. markets it had negotiated for UK businesses remains in place. Taiwan was “hopeful and confident” that the final results would reflect agreements already reached, securing relatively preferential treatment.
Another group, including China, India, Japan, and 42 other countries, is being hit with higher levies of 12.5%. China opposes all forms of unilateral tariffs and said there was no forced labor in China. India is engaged with the Trump administration on the Section 301 proceedings, noting that the proposed tariffs were not final. Separate trade investigations that led to a 25% levy on Brazilian imports are expected to affect other trade partners as well.
The new tariffs were proposed with numerous exemptions, including for imports already subject to U.S. Section 232 national security tariffs, such as autos, steel, aluminum, and copper products. The proposal also lists 76 pages of specific product exemptions, including crude oil and petroleum products, rare earths and other specialty metals, beef, coffee, certain fruits and vegetables, pharmaceuticals, organic chemicals, and aircraft parts.
Analysis
The Trump administration adjusted tariffs on aluminum, steel, and copper imports to increase investment in the U.S. agriculture and manufacturing sectors. The adjusted tariffs take effect on June 8 and remain in effect through December 31, 2027. The administration also proposed new tariffs of 10% and 12.5% on imports from 60 economies after determining that they did not curb trade in goods made with forced labor. Public comments on the proposed tariffs will be accepted through July 6, with a public hearing scheduled for July 7. The affected countries maintain that they do not understand whether the proposed tariffs are included in, on top of, or in the process of being made under the deals made with the Trump administration last year.
Higher duties on steel, aluminum, and copper, which are critical materials for pipelines, drilling rigs, electrical grids, and transformers, drive up capital costs for oil, gas, and power projects, potentially slowing the record output levels the administration has pursued and raising costs for American consumers and businesses. Exemptions for crude oil and petroleum products offer limited relief, as downstream equipment, construction materials, and supply chain disruptions from broad tariffs still inflate project timelines and expenses.
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