U.S. President Donald Trump signed a formal order imposing 25% tariffs on steel imports and 10% on aluminum imports.

The tariffs, which go into effect March 23, do not appear to directly affect fasteners and other finished steel products.

“For the purposes of this proclamation, ‘steel articles’ are defined at the Harmonized Tariff Schedule (HTS) 6‑digit level as: 7206.10 through 7216.50, 7216.99 through 7301.10, 7302.10, 7302.40 through 7302.90, and 7304.10 through 7306.90, including any subsequent revisions to these HTS classifications,” the Trump administration stated in its official statement published on WhiteHouse.gov.

“It is worth mentioning that fastener products, which typically fall under the HTS code header of 7318, were largely spared,” stated National Fastener Distributors Association president Kevin Miller. “However, the short, medium and long-term effects of this action on steel and aluminum-related industries and downstream products are simply unknown and unknowable at this point.

“I urge you all to examine your supply chains of finished goods and raw materials to determine where your risks lie and begin working with your customers and suppliers to mitigate any potential detrimental effects this action may have on your business.”

G.L. Huyett CEO Timothy O’Keefe echoed Miller’s remarks.

“The cost of industrial fasteners will be affected directly if they are manufactured from imported material, to the extent of raw material cost to total cost to produce,” O’Keefe noted in his March 5, 2018, blog on the Trump tariffs. “Less-processed parts like pins and non-threaded products would tend to be affected more than highly-engineered fasteners where fabrication is the highest percentage of cost.”

Wire rod imports generally uses a 7217 HS code.

The threat of steel hikes could have a chilling effect on the U.S. economy, economists warn. Steel prices were already up by more than 12% year to date as of Feb. 27, Barron’s reports.

Trump said Canada and Mexico will be excluded for now, as the U.S. discusses its national security relationships and the North American Free Trade Agreement with both countries. Tariffs could be modified for other countries, such as Australia.

In a ceremony at the White House where he officially authorized the tariff, Trump characterized the tariffs as “a matter of necessity for our security.”

The tariffs were justified because the Commerce Department reported that steel and aluminum imports “threaten to impair the national security,” as defined by Section 232 of the Trade Expansion Act of 1962.

Experts say that rationale is unlikely to hold up under the rules of the World Trade Organization.

U.S. steel users warned against the new tariffs.

The Industrial Fasteners Institute sent an official letter to the White House. Dated February 22, the IFI letter warned against a tariff on steel.

“In our view, the negative effects on downstream consumers of steel and aluminum far outweigh any benefits that may be afforded to the domestic metals industry. Specifically, we suggest that the negative impacts from these remedies will do more harm than good to our economy and national security than they will provide benefits to the domestic metals producing industries.”

“To be frank, steel and aluminum are commodities until somebody makes them into a part/end item,” the IFI stated in its letter to the White House. “We are concerned that the proposed remedies under the 232 investigations do not give proper consideration to the importance of downstream industries to that industrial capacity.”

In 2015, the U.S. fastener industry accounted for $13.4 billion (of a $69.6 billion global market), and is projected to grow at 2.6% per year to roughly $15 billion by 2020, according to the IFI. In the U.S., the fastener industry employs approximately 42,000 people at about 850 different manufacturing facilities.

The IFI also joined 14 other trade associations representing over 30,000 US steel-using manufacturers to warn that the entire U.S. steel supply chain “will be damaged by restrictions on steel imports.”

In addition to the IFI, other steel using associations included the American Wire Producers Association, the Forging Industry Association, the National Tooling and Machining Association, the North American Die Casting Association, the Precision Machined Products Association, and the Precision Metalforming Association.

The associations represent one million U.S. steel-using jobs compared to 80,000 jobs in the domestic steel industry. The group noted that domestic steel manufacturers are reporting their best earnings in more than a decade.

Statements from the White House refuted those claims.

“The downstream effects of steel and aluminum tariffs are insignificant, and the mission here is to preserve our steel and aluminum industries for national security and economic security,” stated White House trade adviser Peter Navarro.

The last time the U.S. imposed a global tariff on imported steel was in 2002 under President George W. Bush. The 30% tariff was ended the following year after the WTO ruled the Section 201 remedy violated global trade practices.

According to one independent study, the 2002 Bush steel tariffs cost 200,000 jobs because of higher steel prices.

The same group now estimates that Trump’s proposed tariffs will cost 179,334 jobs — which is more people than the total number of people working in the steel industry today — and will result in a loss of five jobs for every job gained.