Trump Considers Scaling Back Steel and Aluminum Tariffs

The administration of Donald Trump is working to narrow the scope of broad 50% tariffs on steel and aluminum imports to combat rising consumer costs and voter dissatisfaction ahead of the November midterm elections. Following reports from the Congressional Budget Office and the Federal Reserve Bank of New York that businesses and consumers are bearing the costs, the administration is reviewing over 400 affected products for potential exemptions, including wind turbines, motorcycles, and heavy machinery.

Proposed overhauls include moving away from a flat 50% tariff on metal content toward varied rates based on total product value, such as 15% for consumer goods and 25% for intermediate goods. However, industrial products and building materials would likely remain at a 50% tariff. These adjustments aim to resolve conflicts with a bilateral trade deal with the European Union that capped tariffs on most European goods at 15%.

The policy shift follows a Supreme Court of the United States ruling that limited the administration's use of emergency powers to impose reciprocal tariffs, which prompted Washington to introduce a new 10% global levy. In response to the volatility, the European Parliament suspended legislative work on ratifying the U.S.-EU trade accord to seek further clarity. Market reactions to the potential rollback included price declines for aluminum on the London Metal Exchange and stock drops for U.S. producers like Alcoa and Century Aluminium.