Published
December 18, 2025
In a process ratcheting tariffs up but not down, the Commerce Department unveiled a new “inclusions” exercise extending the reach of the 50% tariffs on steel and aluminum to hundreds of billions of dollars’ worth of so-called derivative products that contain these metals.
It isn’t just steel girders or aluminum ingots being “included”: Cutlery, bulldozers, office furniture, fire extinguishers, golf carts, and even condensed milk are now subject to the steep Section 232 tariffs on steel and aluminum. In most cases, these taxes are imposed not on the product’s total value but on the value of the steel and aluminum content in the product.
Separately, a new “inclusions” process allows additional categories of auto parts to be added to those already subject to the 25% tariff introduced in May. The administration is reportedly considering “inclusions” for other Section 232 tariffs, e.g., those on wood products.
Exclusions Exiled: It wasn’t always like this. In 2018, the Commerce Department created an exclusions process in which companies could petition for particular steel and aluminum imports to be spared the Section 232 tariffs. Most were rejected. Relief was granted on a company-by-company basis, but it was meaningful. Nothing like this exists today—in fact, the “inclusions” process is rowing in the other direction.
And the tariff creep is set to continue. The “inclusions” process has quarterly application windows when petitioners may request that tariffs be applied to additional derivative products. The first round extended steel and aluminum tariffs to 407 Harmonized Tariff Schedule (HTS) codes, affecting more than $240 billion of imports.
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Paperwork Burdens: Compliance requirements add to the burden. Importers must show documentation affirming where the steel used in a product was melted and poured, where the aluminum was smelted and cast, the value and weight of the metals in the product, and what percentage of the value those metals represent. These compliance costs are impacting all tiers of suppliers down to producers of basic materials.
Retaliation from Abroad? U.S. trading partners are responding in kind. For example, Canada is rolling out a similar process. Ottawa last month announced it will apply a 25% tariff on the full value of listed steel derivative products from all countries. The Canadian government notes:
“The United States, the world’s largest economy, is fundamentally reshaping all its trade relationships, causing major disruption and upheaval for Canadians. It is time to transform our economy from one that is reliant on a single trade partner to one that is stronger, more self-sufficient, and resilient to global shocks.”
Changes Needed: In a September letter signed by more than 40 U.S. business organizations, the Chamber and other trade associations called for changes to the “inclusions” process. These recommendations remain valid. The business community is advocating for:
- A revised approach that hews to the statutory intent of Section 232 of the Trade Expansion Act of 1962, namely, that tariffs may be imposed only when imports “threaten to impair the national security” — which imports of many of the tariffed products named above do not;
- A more transparent process that allows industry a meaningful opportunity to rebut requests for tariff hikes sought by others and also to secure the removal of a product from the derivatives list after it has been added; and
- Clear guidance on aspects of the “inclusions” process such as the valuation criteria to be used (as the letter notes, Commerce’s Bureau of Industry and Security has indicated it would “publicly post a memo that ‘[s]ummarizes the rationale’ for making determinations. The memos posted to date offer no such analyses.”).
Part 1: How Tariffs Risk Hollowing Out American Manufacturing
Part 2: How Tariffs Risk Hollowing Out American Manufacturing
Part 3: How Tariffs Risk Hollowing Out American Manufacturing
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About the author
John G. Murphy
John Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy and regularly represents the Chamber before Congress, the administration, foreign governments, and the World Trade Organization.
