November 2025 Volume 7

WASHINGTON UPDATE

TARIFF EXPANSION By Omar S. Nashashibi

I n the early 1970’s, then Louisiana Senator Russell Long lamented that tax reform simply meant, “don’t tax me, don’t tax thee, tax the fellow behind the tree.” This famous saying endured for decades and now aptly applies to tariffs. The current administration is imposing tariffs at an unprecedented rate on virtually every country, on thousands of imports, and with plans to expand those tariffs to cover more shipments to the U.S. Through September 2025, the Federal Government collected roughly $160 billion in tariff revenue, with some estimating that that U.S. Customs is on pace to generate over $300 billion in annual revenues from tariffs. Tariffs currently apply to countries, to inputs and finished goods, to transport vessels, and soon, possibly to industrial machinery, making it safe to assume that, when in doubt, a tariff applies. While much of the focus remains on country to country negotiations and the reciprocal tariffs under the International Emergency Economic Powers Act of 1977 (IEEPA), it is the Section 232 national security tariffs on products goods and the Section 301 tariffs on China that may have the most lasting effect on manufacturing. Knowing where President Trump is heading with tariffs, is as important as knowing where we have been. The U.S. earlier this year began imposing tariffs under IEEPA on every country in the world, including some territories uninhabited. The rates range from 10 percent to 41 percent, with now combined rates on some countries such as India reaching 50 percent. Washington is stacking many of the tariffs for China, leaving some steel forgings entering the U.S. at a 95 percent rate if they appear on the Sections 232 and 301 lists when combined with IEEPA. Among the many differences between the trade laws used by President Trump is the most glaring – courts have upheld his use of Sections 232 and 301, whereas the IEEPA tariffs are facing legal challenges. Following oral argument before the U.S. Supreme Court on November 5, 2025, the Justices will determine the fate of the President’s tariffs on countries using the IEEPA tariff action, an untested approach until this presidency. At stake with that ruling is nearly $100 billion worth of tariff revenue already collected from importers by U.S. Customs and Border Protection. It is unclear when, or how, the Court may rule, but what is clear is that a ruling either way impacts all of the forging industry. The Supreme Court upholding a president’s ability to use the IEEPA law to impose tariffs establishes a precedent, not only for this administration but also for future White House occupants. President Trump used IEEPA to impose tariffs on countries, but also force them to agree to new trade terms with the U.S. Should the court rule against the IEEPA tariffs, will those trade deals fall apart? Will the U.S. Government have to return $100 billion in tariffs collected?

This is where the president can turn to more proven options the Section 232 and 301 tariffs. As of this writing, the Trump administration used Section 232 national security tariffs to impose or propose a 50 percent tariff on steel, aluminum, and copper; 25 percent on heavy duty trucks, passenger vehicles, light trucks, upholstered furniture, and cabinets; and 10 percent on lumber and timber. Pending national security tariffs include those planned for commercial aircrafts and parts, semiconductors, critical minerals, wind turbines, drones, and polysilicon wafers. Looking back to March 2025, when President Trump began imposing tariffs on steel and aluminum, it was clear that tariffs only on the input and not the finished forging would lead to a flood of imports. Therefore, a natural extension is to expand the national security tariffs to derivatives made of those metals, such as forgings. The President and his team understood that gaps in critical supply lines create vulnerabilities, and no more so than among North American forgers. In 2020, the Defense Logistics Agency identified 30,061 of 32,597 specialized items that contain casting and forged parts. These are mission critical and other components without which our U.S. military could not succeed. The Trump administration has now extended tariffs on steel and aluminum to cover roughly 700 imported goods made from those inputs, with additional expansions of the 232 tariffs expected in the coming months. A more recent development involving the national security tariffs is an investigation initiated by the U.S. Commerce Department into imports of industrial machinery and robotics. Specifically, the administration is considering whether to impose tariffs on: • Robots and programmable, computer-controlled mechanical systems; • CNC machining centers, turning and milling machines, grinding and deburring equipment, industrial stamping and pressing machines; • Automatic tool changers, jigs and fixtures, machine tools for cutting, welding, handling, etc; and • Application-specific specialty metalworking equipment (e.g. autoclaves, industrial ovens, metal finishing/treatment machinery, EDM tools, laser and water-jet cutting systems). The White House is committed to using tariffs as a primary means to increase domestic manufacturing, and no tool is as sharp as the Section 232 tariffs. With now over a dozen tariff actions in place or pending on manufactured goods, inputs, and machinery, even should the Supreme Court invalidate the IEEPA tariffs, much of the manufacturing sector is already subject to 232 trade actions.

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FIA MAGAZINE | NOVEMBER 2025