On February 10, U.S. President Donald Trump significantly increased tariffs on steel and aluminum imports to a flat 25%, with no exceptions or exemptions. This move aims to support the struggling U.S. industries but also risks escalating trade tensions globally. Trump signed proclamations raising the aluminum tariff from 10% to 25%, removing country-specific exemptions and product exclusions that had previously allowed imports from nations like Canada, Brazil, Mexico, and South Korea to enter duty-free. These changes will take effect on March 4.
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The tariff hike will simplify the system, applying the 25% rate uniformly to all countries. Trump mentioned that he would consider granting Australia an exemption due to its trade deficit with the U.S. The tariffs are an extension of Trump’s 2018 Section 232 measures, which were originally imposed on national security grounds to protect domestic steel and aluminum industries. The new move also includes a requirement that steel and aluminum imports be produced within North America to prevent circumvention by Chinese and Russian metals.
In addition, the tariffs will now cover downstream products made from foreign steel, such as fabricated structural steel and aluminum extrusions. Trump’s trade advisor, Peter Navarro, stated that these measures would end foreign dumping, boost domestic production, and strengthen the U.S. steel and aluminum industries, which are vital to national security.
Trump also announced plans to implement reciprocal tariffs on countries that impose duties on U.S. goods and mentioned potential tariffs on cars, semiconductors, and pharmaceuticals. Despite potential retaliation from other countries, Trump expressed indifference to such threats.
U.S. data showed that aluminum production in the country has declined significantly since 2000, and steel imports made up 23% of U.S. steel consumption in 2023. Canada, Brazil, and Mexico are major suppliers of steel to the U.S., with Canada being a significant exporter of aluminum. Canada’s industry minister criticized the tariffs as unjustified, noting that Canadian metal supports key U.S. industries like defense and energy.
While China exports minimal steel to the U.S., it contributes significantly to global overcapacity, leading to transshipment of Chinese steel through other countries to bypass tariffs. Following this announcement, shares of U.S. steel and aluminum companies surged, while those of Asian and European steelmakers dropped.
Trump first imposed tariffs on steel and aluminum in 2018 under national security laws, later offering exemptions and quota deals to various countries. His successor, Joe Biden, continued these policies with additional agreements. The Steel Manufacturers Association praised Trump’s decision to remove exemptions and quotas, supporting the new tariffs.
