Consumers may soon feel the pinch from a US trade policy that is imposing hidden tariffs on a vast array of finished goods. By targeting “derivative” products that contain steel, from bulldozers to kitchen kettles, the United States is creating a cost-inflationary ripple effect that is putting immense pressure on European manufacturers and, ultimately, their customers.
The policy has expanded far beyond its initial focus on raw steel imports, which are subject to tariffs of up to 50%. A list of 407 product categories has been designated as “derivative,” meaning they are now also subject to duties based on their steel and aluminum content. This list is diverse, covering everything from industrial equipment to household furniture.
European industry leaders fear this list is set to grow. A new consultation period with a September 29 deadline is seen as a mechanism for further expansion, creating an environment of profound uncertainty. “It could be a motorbike that is now hit, or a table with a small bit of metal on it,” warned Luisa Santos of BusinessEurope, highlighting the unpredictable nature of the policy.
This uncertainty forces businesses to make costly defensive moves. German MEP Bernd Lange described a motorcycle factory that, unable to guarantee the exact metallic content of its bikes, deliberately over-declares it. This results in higher tariff payments but is considered a necessary expense to avoid the risk of a 200% fine.
These added costs—from the tariffs themselves and the compliance measures—are likely to be passed down the supply chain. As industry groups like Eurofer call for protective measures, the underlying economic reality is that these hidden tariffs on manufactured goods will inevitably contribute to higher prices for businesses and consumers alike.