US Expands Steel and Aluminum Tariffs, Big Impact on Global Supply Chain

The U.S. Department of Commerce has announced its decision to increase tariffs on over 400 products containing steel and aluminum. The decision, effective immediately on August 19, 2025, adds 407 product categories to the list of “steel and aluminum derivative products.” A 50% tariff will be applied to the steel and aluminum content in these products, in addition to country-specific tariffs on the non-metal components. The new list includes items from wind turbines, mobile cranes, home appliances, bulldozers, train cars, and motorcycles to automotive parts such as exhaust pipes and the electrical steel used in electric vehicles.

Expert Analysis and Opinions

Experts consider this move a “strategic shift” in U.S. trade policy aimed at protecting and reviving the domestic manufacturing industry. Jeffrey Kessler, Under Secretary of Commerce for Industrial Security, emphasized that this measure is intended to “broaden the scope of steel and aluminum tariffs while blocking pathways for evasion.”

According to Jason Miller, a professor of supply chain management at Michigan State University, the new tariff policy will impact at least $320 billion worth of imported goods, based on the total customs value from 2024. He warned that this “will add further pressure to inflation” in the U.S. Analysis from Wolfe Research also showed that the previous 25% tariff had already caused steel prices to rise by up to 16% compared to the 2024 average, and aluminum prices are expected to double.

Data from Reputable Sources

• A report from the consulting firm Evercore ISI stated that these new product categories represent more than $200 billion in import value in 2024, raising the average effective tariff by approximately 1 percentage point.
• According to U.S. government data, about 25% of the steel and 50% of the aluminum used in the U.S. are imported. Canada, Brazil, and Mexico are the largest suppliers. Specifically, in 2024, Canada accounted for more than 60% of the aluminum imported into the U.S.
• A study by Nomura Securities estimated that if steel and aluminum prices increase by 10% compared to 2024, the operating profit of U.S. automakers like Ford Motor and General Motors could decrease by about 3-4% if they are unable to pass the costs on to consumers.

Short-Term and Long-Term Impacts

Short-Term Impacts: Foreign manufacturers will face higher costs and may be forced to pass these costs on to U.S. consumers, affecting the prices of consumer goods. The global logistics and supply chain could experience “shocks” due to this sudden change. Large companies like Tesla, which failed to persuade the government against the tariffs, will face increased production costs. Some countries, such as Japan, have voiced concerns and requested exemptions, while Canada and Mexico are the most heavily impacted nations.

Long-Term Impacts: This policy could spur a revival of the U.S. domestic steel and aluminum industries, creating jobs and reducing reliance on foreign supply. However, as foreign automakers and Tesla have warned, the lack of domestic production capacity to meet current demand could lead to supply shortages and higher prices. Building and operating new metal smelters could take at least three years, making it difficult for U.S. metal prices to stabilize for an extended period. In the long run, this policy could also trigger retaliatory tariffs from trading partners, escalating global trade tensions.