The US government has introduced a new process allowing steel producers to request the inclusion of derived steel products under Section 232 tariffs. This move could push US steel prices higher amid rising import restrictions. Major US steelmakers like Nucor and Steel Dynamics have aggressively applied to expand tariff coverage, signaling significant market shifts.
Section 232 Tariff Expansion Targets Derived Steel Products
On February 10, 2025, the US reinstated full 25% tariffs on steel imports, removing country exemptions and quotas by March 14. The previous product exclusion process ended, but now steel producers can request the inclusion of additional derived steel products. The Department of Commerce set three two-week application windows annually, with the first opening May 2. Nearly 500 HS codes were submitted, mostly by top producers such as Nucor, Cleveland-Cliffs, and Gerdau.
Impact of Section 232 Inclusions on US Steel Prices and Market Dynamics
The US steel import tariff rose to 50% on June 4, excluding the UK, intensifying protectionist measures. If derived steel product imports face higher tariffs, domestic demand will likely increase, raising US steel prices. However, the 50% tariff applies only to the steel portion of imported goods, while other components fall under different tariffs. The Commerce Department will decide on product inclusions within 60 days, with initial rulings expected mid-July. This uncertainty complicates forecasting for steel buyers and exporters.
SuperMetalPrice Commentary:
The Section 232 tariff expansion signals a tightening US steel market as domestic producers seek to curb imports of derivative products. This strategy aims to protect national security and industry growth but introduces price volatility. Global supply chains must adapt quickly to evolving tariff regimes, which will influence commodity pricing and investment decisions. Monitoring Commerce Department decisions will be critical for market participants anticipating shifts in steel demand and costs.
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