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New Aluminum and Steel Tariffs Take Effect – How Will Your Supply Chain be Impacted?


On June 1, 2018, new tariffs on steel and aluminum imports from Canada, Mexico, and the European Union (EU) went into effect. The tariff rates of 25 percent on steel and 10 percent on aluminum, have been imposed following recent national security investigations of steel and aluminum imports to the United States under Section 232 of the Trade Expansion Act of 1962. Department of Commerce determined earlier this year that imports of steel and aluminum threaten U.S. national security and recommended the imposition of tariffs.

Steel and aluminum tariffs relating to the Section 232 investigations for imports from most countries, went into effect on March 23, 2018. Canada, Mexico, and the EU had temporary exemptions, which were set to expire on June 1. The Administration announced on May 31 that the exemptions would not be renewed due to insufficient progress in NAFTA negotiations and talks with the EU.

Now that the tariffs are in force and word of countermeasures against U.S. products come out, analysts are discussing the unintended effects and consequences, including impact on the U.S. economy. U.S. manufacturers that rely on global supply chains must consider how they will navigate the fallout, and many  domestic manufacturers are applying for exclusions through the Commerce’s Bureau of Industry and Security.

As the manufacturing world has become more complex and interrelated with businesses working with low-cost global suppliers and outsourcing services like precision machining, it is essential for manufacturers to plan for and mitigate supply chain risks. As we are now seeing, world politics and economies can quickly trigger instability. Dramatic changes can occur quickly and have a detrimental effect on your productivity and profits.

Despite the prevalence of geo political and other types of supply chain risks, many manufacturers fail to identify and prepare for supply chain interruptions. A trade policy change, a business collapse, or other trigger event can suddenly bring your work flow to a halt. Scrambling for a solution at this point can result in costly downtime and damage to the reputation of your business. Better to put a contingency plan in place before the breakdown occurs. Careful planning through analysis of conditions and relationships will allow you to anticipate potential weak points and develop a plan for averting a crisis.

Developing strategic partnerships with dependable suppliers is the best way to avoid supply chain risks and uncertainties. An economically stable supplier with a broad range of experience will work with you to establish an effective, efficient, and profitable supply chain. Nolte Precise Manufacturing works hard to be a strategic and reliable supplier of precision machining services. Contact us today to learn how we can help you!