The global industrial metal trade pattern is changing once again! Trump reshuffles metal tariffs: 50% high wall does not fall, exemptions and graded tariffs run parallel.

The Trump administration announced that it will maintain a 50% tariff on various imported steel, aluminum, and copper products. At the same time, the administration will simplify the tax structure for products made with negligible amounts of metal components and impose a unified 25% tariff on certain proportion of finished products and related derivative products. Products containing 15% or less of steel, aluminum, or copper will no longer be constrained by these "Section 232" metal tariffs. Additionally, for certain metal-intensive industrial equipment and power grid equipment, a 15% tariff rate will apply until 2027, aimed at accelerating the construction of large-scale AI data centers and the "reshoring of manufacturing to the United States" policy that is currently underway across the country. The latest extensive restructuring of metal tariffs also includes improvements to tariffs on products with lower metal content, such as steel, aluminum, or copper. While maintaining the tariff barrier, the Trump administration has begun to acknowledge that the old metal tariff system has had excessive side effects on downstream manufacturers. Previously, steel and aluminum tariffs were raised from 10% to 50% and expanded to include a wide range of "derivative products," resulting in even products with small amounts of metal components being affected, making compliance for businesses extremely complex and increasing lobbying pressure. In terms of trends in the prices of industrial metals, the latest adjustment may deepen the division in pricing between the U.S. market and the global market, instead of unilaterally raising global benchmark prices. Earlier this year, U.S. aluminum buyers had to pay a premium equivalent to 68% of the LME benchmark aluminum price in January, showing that high tariffs had pushed domestic physical premiums in the U.S. to extremely high levels. The new tariff plan essentially recognizes that the previous method of calculating tariffs based on metal content was too cumbersome. Therefore, the new approach maintains high tax rates on upstream basic metals while differentiating treatment for downstream equipment and low-metal content products. From a macro policy adjustment perspective, this represents a shift from "comprehensive import restrictions" to a focus on "protecting the country's upstream metals and critical industrial chain." Furthermore, with the Supreme Court overturning some broad national tariffs earlier, it shows that metal tariffs have become a more stable and sustainable trade weapon for the White House. A senior official in the Trump administration stated that these adjustments are aimed at simplifying a complex tariff policy and providing necessary measures for companies dealing with President Donald Trump's tariff system. Since the president has not formally announced these measures, the official provided details anonymously in media reports. The Trump administration has reshuffled the extensive metal tariff network! 50% high tax rate remains, exemptions and graded taxation implemented simultaneously The focus of the Trump administration's adjustment to metal tariffs is not on "lowering taxes," but on "tiered tax rates and adjustments" - which is reflected in the fact that goods with a total metal content of less than 15% are actually exempt from metal tariffs. Products determined to be "predominantly made from" a certain metal will face a lower 25% tax rate, and products manufactured overseas but completely using U.S. metal will be subject to a 10% tariff, while certain metal-intensive industrial equipment and power grid equipment will be subject to a 15% tariff before 2027. However, imported metal products that are made entirely or almost entirely of aluminum, steel, or copper (such as steel coils and aluminum sheets) will be subject to a uniform 50% tariff based on their total value. The latest statement from the White House indicates that under the new tariff policy structure, products with a total steel, aluminum, or copper content of less than 15% will be exempt from metal tariffs. The statement also notes that certain other derivative products, if determined to be "predominantly made from" one of these metals, will be subject to a lower 25% tax rate. Products with a total steel, aluminum, or copper content of 15% or less will no longer be constrained by these "Section 232" metal tariffs. The White House also stated that products manufactured overseas but completely using U.S. metal will face a lower 10% tariff rate. Certain other metal-intensive industrial equipment and power grid equipment will be subject to a 15% tariff before 2027, aimed at enhancing the U.S. industrial base. Despite these adjustments, high 50% tariffs will be maintained for products made entirely or almost entirely of aluminum, steel, or copper - such as pure imported steel pipes and aluminum sheets. According to the official, this tariff will be levied based on the total value of the product, rather than just its metal component value. After the announcement, the North American copper benchmark - Comex copper futures prices briefly rose by 1.4%, but later surrendered gains and fell by 0.5% during U.S. trading on Thursday. This latest shift comes after months of lobbying by American companies. Many companies had previously argued that the old tariff measures against certain metal imports unfairly targeted U.S. businesses. While the Trump administration argued that these tariffs were meant to encourage domestic manufacturing, extending the tariffs to so-called derivative products meant that even products containing only a small amount of metal elements - a small part of the overall product weight and value - would be taxed. To accelerate President Trump's goal of "reshoring manufacturing to the United States" The revised metal tariffs, established under Section 232 of the 1962 Trade Expansion Act, come a year after the core of Trump's trade agenda was unveiled in his second term. This agenda imposed broad tariffs on goods from dozens of other countries, aiming to advance the "reshoring manufacturing to the United States" policy, expand U.S. access to other markets, and rebalance global trade flows. Although the U.S. Supreme Court overturned Trump's tariffs imposed on a country-by-country basis earlier this year because they were based on an emergency law, President Trump has been using other authorizations to rebuild the tariff barrier. The government also announced tariffs on imported drugs on Thursday, imposing higher tariffs on products produced by companies that do not manufacture drugs in the U.S. or have not reached an agreement with the White House to lower costs for American consumers. Officials on Thursday used examples such as dental floss and other special consumer goods to show which products would benefit significantly from the adjustment to metal tariffs. Dental floss has a small metal part for cutting the floss, but otherwise does not contain a large amount of steel or aluminum. Washing machines are also expected to benefit from the adjustment. This structure may result in higher tariffs on some imported steel and aluminum products, while easier compliance commitments are being used to mitigate the impact. Under the previous system, when steel and aluminum tariffs applied to derivative products, tariffs were levied based on the quantity of these metals, making it difficult to quickly calculate the appropriate tariff amount. Supporters of the revised metal tariff plan argue that this will support the government's efforts to promote the reshoring of domestic manufacturing. "This action will help ensure that these tariffs work as intended to support domestic manufacturing and American workers," said Jon Tucci, Chairman of the "Prosperous America Alliance" representing American manufacturers. The midterm elections in November, which will determine the control of Congress, are likely to be influenced by voters' perception of the U.S. economy. Tariff policies and the conflict in Iran have significantly raised the cost of living for American citizens, posing a risk to the Republicans led by President Trump. The aforementioned senior Trump administration official downplayed the impact of the revised tariff plan on consumer prices. What is the impact on industrial metal price trends? Last year, the Trump administration imposed 50% tariffs on foreign steel and aluminum as a measure against other manufacturing entities, including China. This decision ultimately also dealt a heavy blow to America's long-standing major trading partners, including Canada, the EU, Mexico, and South Korea. Shortly thereafter, the Trump administration expanded the coverage to include so-called derivative products containing these metals. In terms of trends in industrial metal commodity prices, the additional impact of the current Middle East conflict on aluminum supply - following Iran's strike on Gulf smelters, LME aluminum prices have hit a four-year high, and both the U.S. and Europe have seen further increases in premiums. The future trading pattern is more likely to be: U.S. domestic steel, aluminum, and copper prices and premiums maintain a strong or even more distorted level, easing some of the pressure on downstream end prices, but global benchmarks such as LME/SHFE may not rise in sync. In other words, the impact of this policy on commodities is primarily regional price differentials and trade realignment, followed by the direction of absolute prices; the positive effects are concentrated on U.S. domestic upstream metal producers and the scrap/ recycling system, while downstream manufacturers relying on imported raw materials still face cost pressures. The temporary reduction of steel and aluminum equipment, power grid equipment to 15% is essentially reducing friction costs for the unprecedented AI infrastructure boom in the U.S., the upgrade of power infrastructure and grid systems, and even new investments in steel mills. Therefore, some Wall Street analysts have stated that the Trump administration's adjustment to tariffs is more precise compared to the old system because it loosens restrictions on the "core industrial/power chain equipment" urgently needed for the "AI data center construction boom." However, analysts also point out that relying solely on tariff adjustments without cheaper energy, a more stable capital expenditure cycle, and a lower level of policy uncertainty is still not enough to transform the U.S. from a "high-cost production hub" to a "global high-efficiency manufacturing center."