[SMM Analysis] The tariff scope for steel derivatives expands under Section 232, with multiple product categories facing a 50% increase in tariffs

On March 4, 2025, US President Trump reiterated for the first time during a joint session of Congress that reciprocal tariffs would be imposed starting April 2. On April 2, Trump signed two executive orders at the White House, formally announcing the imposition of reciprocal tariffs on trading partners, including a 24% tariff on Japanese imports. Effective April 3, the US implemented an additional 25% tariff on automotive products such as passenger vehicles, multipurpose vehicles, SUVs, and compact cars, which also covered Japanese automobiles.

In 2018, the Trump administration, citing national security concerns under Section 232 of the US Trade Expansion Act, imposed tariff hikes of 25% on imported steel and 10% on aluminum products. This policy triggered global trade friction.

• Section 232: Section 232 of the US Trade Expansion Act authorizes the president to adjust import tariffs or impose quantitative restrictions when foreign imports threaten national security. The Trump administration frequently invoked this provision to impose additional tariffs on steel, aluminum, and their derivative products.

June 3, 2025: President Trump issued Proclamation 10947, adjusting Section 232 tariff rates for US aluminum and steel imports. Additional 25% tariffs were imposed on aluminum and steel imports (excluding UK products) and their derivatives, raising the total Section 232 tariff rate for these products from 25% to 50%.

June 13, 2025: The US Department of Commerce announced amendments to Annex 1 of Proclamation 10896, adding more steel derivative products under Section 232, such as refrigerators, freezers, dryers, washing machines, dishwashers, stoves/ovens, kitchen food waste disposers, and welded wire racks. These products, previously exempt from Section 232 steel and aluminum tariffs, became subject to a 50% tariff effective June 23, 2025.

Starting at 12:01 AM on June 23, 2025, Chinese companies exporting listed products to the US faced a revised tariff structure: 301 tariffs (7.5%-25%) + 20% IEEPA fentanyl tariff + 50% (Section 232 steel derivative tariff - value content). Prior to this date, the tariff structure was 301 tariffs + 20% IEEPA fentanyl tariff + reciprocal tariffs. Since Section 232 products are not subject to reciprocal tariffs, the tariff framework changed after June 23.

SMM New Energy Industry Research Department

Cong Wang, 021-51666838

Rui Ma, 021-51595780

Disheng Feng, 021-51666714

Yanlin Lü, 021-20707875

Zhicheng Zhou, 021-51666711

Haohan Zhang, 021-51666752

Zihan Wang, 021-51666914

Jie Wang, 021-51595902

Yang Xu, 021-51666760

Bolin Chen, 021-51666836