On June 12, the U.S. Department of Commerce announced that, starting June 23, the Trump administration will impose a 50% tariff on home appliances containing steel components. This new tariff will apply to common household appliances such as washing machines, dishwashers, refrigerators, ovens, dryers, freezers, kitchen garbage disposers, and welded shelving units. This is the first time the Trump administration has explicitly included everyday consumer goods in the steel derivative tariff list, with previous tariffs primarily focused on industrial products, such as automobiles and auto parts. According to the Department of Commerce, the move is intended to address “trade actions that harm national security.”
According to the Federal Register, the tariff will be assessed based on the value of the steel components in each item, rather than the price of the entire product. The policy is expected to further increase the cost of living for American households. Just one week before this measure, the Trump administration raised tariffs on steel and aluminum imports from 25% to 50%. This new round of tariffs extends previous actions on products such as automobiles, airplanes, and energy equipment, and has led to widespread dissatisfaction from countries like Canada, Mexico, and those in Europe. It has also placed additional cost pressures on industries that rely on metals, such as automobile manufacturing, construction, and oil drilling.
Current Inflation Situation in the U.S. and Future Price Pressures
Despite external tariff pressures, U.S. government data shows that overall inflation remains at a moderate level. According to data released Wednesday, the price increase of household appliances was lower than the overall inflation rate. Treasury Secretary Janet Yellen stated at a Senate hearing that many businesses have yet to pass on the cost of tariffs to consumers, and U.S. inflation has dropped to its lowest level since 2021. However, several economists warn that, as the scope of tariff increases continues to expand, consumer price pressures may begin to show in the later part of this year.
Global Impact of Tariff on the Home Appliance Industry
The U.S. home appliance market is vast and holds significant sway over the global appliance industry. U.S. consumers continue to show growing demand for home appliances, with high expectations for product quality, functionality, and smart features. According to the Consumer Technology Association (CTA), U.S. consumer spending on consumer technology products reached $450 billion in 2024, with home appliances accounting for a large portion of this. Although the U.S. has some well-known domestic appliance brands, such as Whirlpool and General Electric, it remains highly reliant on imports for certain product categories. For instance, the U.S. imports millions of refrigerators annually, mainly from China, South Korea, and Mexico.
The new tariff on steel home appliances could prompt U.S. domestic appliance manufacturers to increase production investments within the U.S., which may boost the development of related industries. However, American consumers may face a series of negative effects. The increase in tariffs will raise import costs, and retailers, in order to maintain their profits, may pass the increased costs on to consumers, leading to higher prices for home appliances. This will particularly affect middle- and low-income households, who may delay or forgo purchasing these appliances, impacting their quality of life.
For the global home appliance supply chain, this policy will have a significant impact. As the world’s largest producer and exporter of home appliances, China exports a huge volume of appliances to the U.S. According to data from the China Chamber of Commerce for Import and Export of Machinery and Electronic Products, the value of China’s home appliance exports to the U.S. reached several billion dollars in 2024. This tariff hike will directly reduce the profit margins of Chinese appliance manufacturers, and some companies may have to reduce their exports to the U.S. market, seeking other overseas markets or expanding their domestic market. South Korean appliance companies, such as Samsung and LG, which hold a strong position in the U.S. market, will also face challenges. The increase in tariffs may weaken the price competitiveness of their products. As for other appliance-exporting countries like Mexico, they will also need to reassess their strategies for exporting to the U.S. to cope with the cost pressure from tariffs.
Domestic Disagreement and Political Negotiation in the U.S.
Within the U.S., there is a divided opinion on the tariff policy. The American Steel Institute supports the policy, arguing that it will help protect domestic steel companies, create more jobs, and revive the steel industry. However, the National Retail Federation strongly opposes it, pointing out that the increased tariffs will ultimately be borne by consumers, reducing the living standards of the public. It could also lead to consumer dissatisfaction with retail businesses, negatively affecting the entire retail sector’s sales performance. Meanwhile, some economists are calling for a reassessment of the tariff policy, noting that while trade protectionist measures may protect certain industries in the short term, they could disrupt global supply chains and damage the overall competitiveness of the U.S. economy in the long run.
Risk of Escalating Trade Tensions and International Retaliation
As the U.S. continues to expand the range of tariff increases, international trade tensions have further intensified. Several countries have already expressed strong dissatisfaction with the U.S. tariff policy and hinted at possible retaliatory measures. The European Commission has stated it will closely monitor the impact of U.S. tariffs on European appliance companies and may take legal action under the World Trade Organization framework, along with imposing retaliatory tariffs on U.S. goods. Canada and Mexico, important trade partners of the U.S., are also actively negotiating countermeasures, potentially adjusting trade agreement terms or implementing retaliatory tariffs on U.S. agricultural products to protect their own interests. In the future, if negotiations fail to reach a consensus, trade tensions may continue to escalate, bringing greater uncertainty to global economic growth.
Additionally, the increase in tariffs could trigger a series of ripple effects. On the one hand, appliance companies may reduce their procurement of steel raw materials, negatively affecting the steel industry and causing price fluctuations. On the other hand, in order to reduce costs, appliance companies may seek alternative materials, which could drive the development of related new material industries.
Industry stakeholders are closely watching the developments, and the future of the U.S. home appliance market and the global home appliance supply chain will be deeply impacted by this tariff policy. The U.S. government will need to balance the pros and cons of the tariff policy, aiming to protect domestic industries while minimizing negative impacts on consumers and global trade stability.
