Via Zero Hedge by Tyler Durden
The Trump administration on Thursday announced a pair of tariff actions under national security authority, maintaining core 50% duties on many imported steel, aluminum, and copper products while overhauling the rules to exempt goods containing negligible amounts of those metals and imposing 100% tariffs on imported patented pharmaceuticals that do not meet new domestic production or pricing conditions.
The pharmaceutical measure targets branded drugs and active ingredients brought in by companies that have neither struck “most-favored-nation” pricing deals with the U.S. government nor committed to manufacturing in the United States. Exemptions will be honored for firms that reach such agreements or are already building or expanding U.S. plants. The policy gives large drugmakers 120 days and smaller ones 180 days to comply. Generics and certain trade-agreement partners are largely unaffected.
Exceptions were also granted, lowering tariffs to 15% — for the European Union, Switzerland, Japan, and South Korea, and a 10 percent levy for the United Kingdom.
Reduced rates reflect prior commitments with trading partners, according to a senior administration official.
The U.K. was awarded a lower tariff “because they were the first ones who did this deal, and they committed to raise their prices for pharmaceuticals, and they have actually done so,” the official told reporters during a background call on April 2.
Trump negotiated deals with 13 pharmaceutical companies over the past year, securing $400 billion in domestic manufacturing investments, the Epoch Times reports.
In tandem,the White House released updated fact sheets detailing changes to Section 232 tariffs on steel, aluminum and copper and their derivative products. The administration will keep 50% tariffs in place on many imported steel, aluminum and copper products. However, goods in which the total steel, aluminum or copper content is below 15% will be effectively exempted. Some other derivative goods will face a lower 25% rate if they are deemed “substantially made” of one of the metals. Even so, 50% tariffs will remain on a large number of derivative products — including imported steel pipe — and will be assessed against the full value of the product, not merely its metal content.
A senior administration official, speaking on condition of anonymity to describe the changes before formal announcement, said the revisions were designed “to simplify a complicated policy and provide more fairness to businesses grappling with President Donald Trump’s tariff regime.”
The adjustments follow months of lobbying by companies that complained that earlier duties on derivative products unfairly hit items containing only trace amounts of metal, Bloomberg reports. Officials cited consumer products such as dental floss, which contains a small metal cutter but otherwise has negligible steel or aluminum content, and washing machines as examples that will now receive relief.
Summary of metals tariffs (via the White House):
- The Trump administration will maintain 50% tariffs on many imported steel, aluminum, and copper products under Section 232 of the Trade Expansion Act of 1962.
- The policy simplifies duties for goods made with negligible amounts of these metals to provide fairness to businesses and ease compliance.
- Goods with total steel, aluminum, or copper content below 15% will be effectively exempted from the metals tariffs.
- Some derivative goods will be subject to a lower 25% rate if they are deemed “substantially made” of steel, aluminum, or copper.
- 50% tariffs will remain in place on a large number of derivative products — including, for example, imported steel pipe — and will be assessed against the full value of the product, not merely its metal content.
- The revisions address months of lobbying from companies that said earlier duties unfairly hit items containing only trace amounts of metal.
- Examples of products receiving relief include consumer goods such as dental floss (small metal cutter with negligible steel/aluminum content) and washing machines.
- The changes build on the administration’s second-term trade agenda and follow the Supreme Court’s earlier decision striking down certain emergency authorities, allowing the White House to continue using Section 232 national security tools.
- Administration officials emphasized that the revisions will not have a significant impact on consumer prices and will help ensure the tariffs function as originally intended.
The revised metal tariffs were established under Section 232 of the Trade Expansion Act of 1962. They come roughly one year after the launch of the administration’s second-term trade agenda, which initially imposed broad levies using emergency authorities. The Supreme Court earlier this year struck down certain country-by-country tariffs imposed under that emergency law, prompting the administration to rebuild protections through alternative pathways.
Administration officials said the changes are intended to support domestic production and American workers while easing compliance burdens. Jon Toomey, president of the Coalition for a Prosperous America, a group representing U.S. manufacturers, welcomed the move. “This action will help ensure these tariffs function as intended to support domestic production and American workers,” he said.
The White House downplayed the revised tariff scheme’s likely impact on consumer prices. Officials noted that while some imported steel and aluminum goods could face higher duties under the new full-value assessment, the simplified structure should reduce administrative headaches for importers.
Full official proclamations, fact sheets and implementation guidance from the Commerce Department and U.S. Customs and Border Protection are now available on whitehouse.gov. Affected industries have a window to adjust supply chains before the changes take full effect. Trading partners are expected to review the measures in the coming days.
Read in its entirety at zerohedge.com.
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