Washington’s Blank Check: How “Derivative” List Gives US Sweeping Tariff Power

The “derivative” products list has effectively given Washington a blank check to impose steel tariffs on a virtually limitless range of goods, a sweeping power that is causing profound alarm in Europe. The vague criteria and the ad hoc nature of the expansion process mean the US can target new industries with minimal warning or justification.
Unlike a clearly defined tariff on a specific commodity, the “derivative” list is a fluid and open-ended concept. The initial inclusion of 407 categories, ranging from cranes to furniture, demonstrated the breadth of this power. Now, a new consultation is underway, suggesting the check is about to be written for a larger amount.
This blank-check power is the root of the uncertainty plaguing European industry. “It could be a motorbike that is now hit, or a table with a small bit of metal on it,” said Luisa Santos of BusinessEurope. This highlights the fear that any product can be deemed a “derivative” at the discretion of US authorities.
This unchecked power is also creating a compliance minefield. With the rules so open to interpretation and the penalties for mistakes so severe (a 200% tariff), businesses are put in an impossible position. The system incentivizes extreme caution, leading to economic inefficiencies like the overpayment of duties.
The European response is increasingly focused on finding ways to limit this power. The calls for clarification from the UK government and the demand for strong trade defenses from EU industry bodies are attempts to rein in what they see as Washington’s arbitrary and damaging use of its “blank check” tariff authority.