The Trump administration is reportedly planning to adjust steel and aluminum tariffs, with a unified tax rate of 25% on steel and aluminum products, which is said to potentially increase the costs of imported goods.

Recent reports show that the Trump administration is preparing major adjustments to the steel and aluminum tariff regime. It will impose a uniform 25% tariff on “derivative products” containing steel and aluminum, replacing the current complex and burdensome tax calculation approach. The policy adjustment is seen as the U.S. government trying to maintain its level of trade protection while easing compliance pressure on businesses, but it could also create new shocks to global trade relationships and industrial supply chains.

On Wednesday, April 1, U.S. Eastern Time, U.S. media, citing people familiar with the matter, reported that the new steel and aluminum tariff initiative may be announced as early as this week. The new policy will stipulate that any finished products made using imported steel and aluminum will be subject to a 25% tariff across the board. By contrast, under the current policy, companies are required to calculate their tax burden based on the steel and aluminum content in the product, with the maximum tariff rate reaching up to 50%.

After the above news broke, sentiment in the industrial metals and manufacturing sectors diverged. On Wednesday, shares of U.S. Aluminum (AA), which had closed up 8.6%, turned lower after the bell; after-hours trading saw the stock fall by about 2% at one point.

Overall, this tariff adjustment looks more like a “technical optimization” of existing trade protection policies rather than a directional shift. The United States still seeks to maintain domestic industries through tariff measures, but at the implementation level it is starting to move toward a “more operable, more predictable” framework.

However, against the backdrop of tighter global trade conditions and intensifying geopolitical games, even adjustments described as “simplifying rules” may trigger ripple effects across supply chains and diplomatic channels. The specific implementation details after the policy takes effect, as well as how different countries respond, will become the key focus for the market.

“Simplified” tariff structure: from complex valuation to a unified tariff rate

The core of the steel and aluminum tariff adjustment reported this Wednesday is the shift from the original complex system of “tariffs based on content” to a more direct unified tariff rate.

Under current rules, when the United States imposes tariffs on certain steel-and-aluminum-containing products, companies must precisely calculate the proportion of metal within them and then pay taxes accordingly, with fees potentially reaching up to 50%. This system is widely criticized at the execution level because it not only increases compliance costs for businesses, but also complicates supply chain management.

The new proposal is expected to adopt an approach of “tariffs based on finished products,” directly imposing a 25% tariff on all related derivative products. Analysts believe this change carries two layers of meaning:

• Lower compliance costs: Companies no longer need to split out material sources or proportions.
• Stronger policy implementability: Reduces filing disputes and regulatory complexity.

That said, it is worth noting that for products that are “almost entirely made of steel or aluminum,” the original higher tariff rates may still be retained.

Original policy intent: seeking balance between protection and economic pressure

The Trump administration previously imposed high additional tariffs on steel and aluminum products, with the main goal of addressing so-called global capacity overcapacity, especially steel exports from Asian countries. But the policy spillover effect has been significant—its impact has also hit allies, including Canada, the European Union, Mexico, and South Korea.

To some extent, this adjustment reflects the real pressure faced by policy makers. At the business level, U.S. manufacturers have long complained that tariff rules are complex and that costs have risen. At the political level, inflation and the pressure of cost of living are eroding voters’ support.

Media reports say that with midterm elections approaching, economic issues have become a key variable, and the government intends to optimize the policy details to ease businesses’ and consumers’ dissatisfaction.

Impact on the market and industrial supply chains: uncertainty remains high

Although the tariff rate is being adjusted from a maximum of 50% (based on content) to a unified 25%, some commentary holds that this does not mean the overall intensity of trade protection is effectively weakening.

On the one hand, for companies that previously struggled to accurately calculate metal content, their tax burden could actually become more certain—possibly even higher. On the other hand, unified tariff collection may expand the scope of application, bringing more products under the tariff regime.

Potential impacts include:

• Global supply chain restructuring: Companies may accelerate adjustments to procurement and production layouts
• Risk of escalation in trade frictions: Ally countries may express dissatisfaction with the new measures or respond with countermeasures
• Increased volatility in metal prices: The market will re-price expectations for demand and costs

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