Tariffs Move Beyond Metals | Issue #91 | 1 October 2025

Tariffs are not new to global trade. What has changed in late September 2025 is their scope and direct impact on capital goods. Industrial machinery, robotics, and even pharmaceuticals now fall under new tariff probes or immediate duties. For procurement, this means tariffs are no longer an upstream raw material story — they are becoming a frontline risk in CapEx sourcing and investment planning (Reuters, 2025a; The Washington Post, 2025; The Guardian, 2025).

Q: Why is this news now?
A: On September 24, the U.S. Commerce Department opened new Section 232 investigations into industrial machinery, robotics, and medical equipment (Reuters, 2025a). On October 1, new tariffs of up to 100% begin on heavy trucks, pharmaceuticals, and furniture (The Washington Post, 2025).

Q: What’s different from previous tariff cycles?
A: Earlier rounds targeted metals. This phase reaches capital goods and finished products, creating direct exposure for manufacturing investments (The Guardian, 2025).

Q: Which industries are most exposed?
A: Automotive (heavy trucks, hybrid cars), life sciences (pharmaceutical imports), and machinery-intensive sectors (robotics, factory equipment).

Q: What legal backdrop matters?
A: The U.S. Supreme Court will hear Learning Resources v. Trump, a case that challenges executive powers under IEEPA (Wikipedia, 2025).

Q: What does this mean for procurement timing?
A: CapEx orders placed in Q4 2025 risk higher costs if delivery or customs classification shifts after tariffs apply.

Case Automotive: Volvo Cars confirmed hybrid production in South Carolina, citing tariff pressures as part of the rationale. Local production reduces exposure to shifting import duties (Reuters, 2025c).

Case Life Sciences: Eli Lilly announced new pharmaceutical manufacturing facilities in Texas and Virginia. The expansion reflects efforts to shield drug production from tariff risks while securing domestic supply (IndustrySelect, 2025).

Case Electrical Equipment: WEG, the Brazilian transformer producer, will invest $77 million in U.S. capacity to serve AI-driven demand. The investment highlights how tariffs accelerate localization in equipment supply chains (Reuters, 2025d).

Procurement Implications:

New AI-driven trade compliance platforms are being piloted to scan supplier invoices and HS codes against evolving tariff lists. Early tests show they can flag misclassified items within hours, potentially avoiding penalties or delays. For procurement teams, this could shorten tariff-related risk assessments by 30–40% compared to manual reviews (ArXiv, 2025).

We are entering a tariff cycle where capital goods and investments, not just raw inputs, are at the center of supply-chain risk.

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