The U.S. Commerce Department has announced a major expansion of import tariffs affecting a range of products containing steel and aluminum, extending duties to more than 400 categories of goods, including automotive components. The move broadens the reach of earlier tariffs, which were originally limited to raw steel and aluminum, and now apply a 50-percent tariff on the metals’ content in finished products, in addition to existing duties on non-metal components. Automakers argue that the U.S. currently does not have the steel and aluminum capacity to handle demand.

According to Evercore ISI, the new policy affects products that totaled more than $200 billion in imports last year, as reported by Reuters. The new taxes are projected to raise the overall effective tariff rate by about one percentage point. Products now included under the tariff expansion range widely, with Reuters listing wind turbines, mobile cranes, bulldozers, railcars, motorcycles, marine engines, and various appliances.

Government officials argue that the new import tariffs are designed to prevent companies from avoiding tariffs by importing finished goods, rather than raw materials.

“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 Jeffrey Kessler, Under Secretary of Commerce for Industry and Security.

The auto sector is expected to be heavily affected. Imported parts hit by the new taxes include automotive exhaust systems, air conditioning components, and bus components, as well as electrical steel used in EVs.

Foreign automakers previously warned that the current domestic steel and aluminum capacity is insufficient to meet consumer demand, raising the risk of production bottlenecks. Tesla in particular sought exemptions for specialized steel used in EV motors and wind turbines, citing a lack of U.S. suppliers, but was subsequently denied.

Back in June, GM stock took at hit following a threat by President Trump to double import tariffs on steel and aluminum.