By Gavin Bade and Bob Tita

The Trump administration plans to expand national-security tariffs on steel, aluminum and a variety of other industries in coming months in hopes of redirecting production in these sectors to the U.S. and establishing a backstop to legal threats in the trade war.

Tariffs on steel and aluminum were expanded this month, covering more than 400 new product lines with 50% levies and increasing compliance costs for companies. Those charges will likely be broadened further, along with expansions of existing tariffs on copper and automotive parts.

New levies on sectors like semiconductors, heavy trucks, pharmaceuticals and ingredients, processed critical minerals, and commercial aircraft and parts, among others, are also likely to be unveiled in coming months.

President Trump has imposed the national security tariffs alongside a broader set of levies: the reciprocal tariffs that Trump announced in April on virtually every nation, sparking months of negotiations with dozens of U.S. trading partners.

Trump's team has tried to keep those negotiations focused only on the reciprocal levies, arguing the sectoral tariffs are non-negotiable because they are based on security imperatives.

Even so, major economies like the European Union, Japan and South Korea have secured commitments from the Trump administration to cap many of the national security levies at 15% -- particularly on strategic sectors like automobiles -- if the foreign governments meet certain conditions like lowering charges on U.S. goods.

Despite those commitments, Trump still holds near-unilateral authority over how national security tariffs are set or altered. That gives the administration an insurance policy if its reciprocal tariffs are struck down in court, people with knowledge of the administration's plans say.

The reciprocal tariffs are based on a novel interpretation of presidential emergency authorities, and are subject to a court challenge that could force the administration to refund those duties to companies. The sector-specific tariffs, by contrast, are imposed under a separate legal authority that is far more established and durable -- Section 232 of the Trade Expansion Act of 1962.

A federal appeals court heard arguments on the reciprocal levies last month, and whichever side loses is expected to immediately appeal to the Supreme Court, which could rule as soon as June. In the meantime, the administration intends to broaden the coverage of Section 232 tariffs so they can remain in place, or be expanded, if the administration loses in court and needs to find another legal authority for its reciprocal duties.

"Section 232 is a tried and true method," said Augustine Lo, a partner in Dorsey & Whitney's national security group specializing in trade law. "Historically, the courts have given the president fairly wide leeway to conduct investigations and impose remedies."

White House spokesperson Kush Desai said Trump "pledged to use tariffs to Make America Wealthy & Strong Again, and the Administration is committed to using every lever of executive power to deliver for the American people."

Plans for some relief

At the same time, Trump's team is considering ways to provide relief from some of those tariffs for a handful of large companies like U.S. automakers and tech firms, the people familiar with the plans say.

U.S. automakers have argued that despite 15% tariffs on Japan and Korea, it is still profitable to produce cars in those countries and ship them to the U.S. -- in part because of higher input prices in the U.S. due to Trump's steel, aluminum and parts tariffs.

Options the administration is considering for relief include expanding existing tariff rebates for automotive assemblers like Ford, Stellantis and General Motors, or applying quotas that allow a certain number of parts to enter the U.S. duty-free, according to people with knowledge of policy discussions. Trump has also floated exemptions from certain tariffs to large tech firms with U.S. operations, or giving some companies with U.S. operations more time before tariffs kick in.

The national security tariffs have also been far more impactful for targeted industries than the reciprocal duties, most of which were only recently imposed. American steel and aluminum producers have been enthusiastic supporters of tariffs on lower-price imported metal and encouraged Trump to add duties to imported finished metal products.

But many U.S. manufacturers -- including automakers, their parts suppliers and other factory owners -- have complained that they are paying billions of dollars in tariffs, along with higher prices for both domestic and foreign materials and components as the levies push up prices for steel, aluminum, copper and components made from those metals.

The additional items, announced Aug. 15, represent a major expansion of the national security tariffs on the steel and aluminum in finished goods that Trump imposed in March. Construction and farm equipment, factory robots, metal-cutting machinery, auto parts and other complex components are among the 400 items now subject to 50% tariffs on the metal contained in them.

The latest tranche of products brings the total value of imported finished products subject to U.S. metal tariffs to more $300 billion, according to Jason Miller, professor of supply chain management at Michigan State University.

"They're just so sweeping in terms of their coverage," Miller said. "We just keep picking up more and more. You're now penalized for importing parts with a high percentage of steel and aluminum."

Inclusion rounds of new duties

The expansion of the metals tariffs is just the first of many inclusion processes that will increase the coverage of national security tariffs. The administration plans to allow companies to petition for additional products to be covered by tariffs three times a year, with the next round opening in September, and another in January of next year. Additionally, the Commerce Department is considering inclusions for auto parts tariffs that could be unveiled in mid-September -- one of four inclusion rounds planned each year -- and the agency is also expected to open an inclusion process for copper tariffs by late October.

Other sector-specific tariffs, such as those planned on semiconductors, lumber, critical minerals and polysilicon used in solar panels are also likely to have inclusion rounds that expand their coverage over time. Already, Trump has announced plans to expand the lumber tariffs to imported furniture products, which would significantly expand the scope of the levies to a number of everyday consumer products.

Trump rolled out the duties on metal derivative products after steel and aluminum producers complained that companies were buying finished products with foreign metal to avoid buying American-made products with domestic metal.

Steelmaker Cleveland-Cliffs waged a yearslong campaign for tariffs on imported electrical transformers and components from Mexico and Canada. Cliffs makes the specialized electrical steel used in the transformers' cores. The latest tariffs cover steel in imported transformers as well as auto exhaust components made of stainless steel, which Cliffs also produces.

Cliffs Chief Executive Lourenco Goncalves said earlier this month the tariffs give "us certainty that the American domestic market will not be undercut by unfairly traded steel embedded in derivative products."

Ken Fedor, a vice president for sales in the U.S. for transformer manufacturer SGB-SMIT Group in the Netherlands, said the U.S. doesn't produce enough electrical steel or transformers to accommodate the surging transformer demand from data-center operators and utility companies. Expanding production of large transformers in the U.S. will take years, he said.

"You just can't ramp it up. It's a highly skilled process. Everything is customized," he said.

He expects the tariff to increase the cost of the large imported transformers that SGB-SMIT builds by as much as 30%. The company makes them in the Netherlands and sells them mostly to U.S. electric utility companies for use at power generating plants and electrical substations.

The new tariffs on the metal in robotics gear will make it more expensive for U.S. companies to automate factory processes by deploying robots. The robot market in the U.S. is now largely supplied with hardware from robotics companies in Japan, South Korea, China and Germany. Automation to reduce labor costs has been an incentive for companies thinking about bringing manufacturing to the U.S. from overseas.

"If the costs go up, it's going to make it harder for companies to justify bringing more manufacturing back," said Jeff Burnstein, president of the Michigan-based Association for Advancing Automation, a trade group for robotics. "Right now, the tariffs look like this is a negative for the robotics industry and manufacturing in general for the U.S."

Trump's aggressive use of tariffs aims to encourage companies to manufacture more of their products in the U.S. by making imports more expensive. But the latest tariffs will likely increase costs for companies that operate plants in the U.S., especially if they use imported parts made mostly of metal, analysts said.

Texas-based construction and mining equipment maker Caterpillar said Thursday its tariff expenses this year could reach $1.8 billion, up from the $1.5 billion forecast earlier this month. The company said it raised its expense outlook in response to the expansion of tariffs. Caterpillar said it has increased production at its U.S. plants over the past decade and boosted exports of its U.S.-made machinery by 75% since 2016.

Automotive companies are also being hit hard by the tariffs, with Ford estimating in July that the levies would cost it $2 billion this year. It and other companies are petitioning for relief from the tariffs, either through exempting certain products or widening existing tariff rebates.

The Trump administration currently lets the automakers receive a rebate on the tariffs they pay for auto parts. But companies have asked the Commerce Department to expand the program to allow them to be refunded for other tariff costs as well, according to people with knowledge of the discussions.

Trump has also floated carve-outs for some large technology firms that would be subject to his tariffs on semiconductors, which are expected to be unveiled this fall. For companies that have committed to build factories in the U.S., "there will be no change," Trump said at an August meeting with Apple CEO Tim Cook, who has committed to build new domestic production facilities. Trump has also said he may start pharmaceutical tariffs at a low level and increase them over time, giving companies time to relocate manufacturing.

Write to Gavin Bade at gavin.bade@wsj.com and Bob Tita at robert.tita@wsj.com

(END) Dow Jones Newswires

August 28, 2025 21:00 ET (01:00 GMT)

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