On Tuesday, the US Commerce Department said it would hike steel and aluminum tariffs on more than 400 items, including motorcycles, wind turbines, appliances, and more. The steel tariffs will also affect EV motors.
New Tariffs Will Raise Prices
Other affected products include marine engines, furniture, and more. The Commerce Department said that 407 product categories will be added to the list of “derivative” steel and aluminum products covered by tariffs, per Reuters. There will be a 50% tariff on the steel and aluminum content of any of these products. These will be levied in addition to any existing country rate on the rest of the product; that is, anything not steel and aluminum inside an electric motor, for example.
More Tariffs Mean Higher Prices
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Consumers will face higher costs as a result of the new tariffs, even if it does take a while for buyers to feel their impact. Price increases may not take effect for some time as various manufacturers of goods work through existing supply before obtaining newly tariffed items like the electric motors subject to the new 50% tariff.
Prices have already risen as a result of tariffs, too. Canada saw the Hyundai Santa Cruz blocked amid a trade dispute, and Ford recently announced it incurred $800 million in tariff-related expenses last quarter alone.
Related: Hyundai Santa Cruz Blocked From Canada Over Trade Dispute
Car Exhausts Will Also Be Tariffed
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The department will also add imported parts for car exhausts in addition to the electrical steel needed for EV motors. These include components for buses, as well as air conditioners. Automakers, predictably, urged the US to forgo further automotive tariffs. Tesla asked the Commerce Dept. to remove steel products used in EV motors (and wind turbines) from the list. Foreign automakers also asked the Commerce Dept. to forgo new tariffs.
“Today’s action expands the reach of the steel and aluminum tariffs and shuts down avenues for circumvention – supporting the continued revitalization of the American steel and aluminum industries,” said Under Secretary of Commerce for Industry and Security Jeffrey Kessler. Tesla says that there is no available US-based alternative to the steel it uses for its motors.
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