 "US steel and aluminum tariffs surge 25% as Trump ditches exemptions")
President Donald Trump boosted tariffs on steel and aluminium imports to a flat 25% “without exceptions or exemptions” on Monday, aiming to help struggling sectors but increasing the possibility of a multi-front trade war.
Trump issued proclamations boosting the United States’ aluminium tariff rate from 10% to 25%, removing nation exceptions and quota accords, as well as hundreds of thousands of product-specific tariff exemptions for both metals. A White House source confirmed that the measures will go into force on March 4.
Millions of tonnes of steel and aluminium imports from Canada, Brazil, Mexico, South Korea, and other nations that had been entering the US duty-free under the carve-outs will see their tariff rates return to 25%.
The move will simplify tariffs on the metals “so that everyone can understand exactly what it means,” Trump told reporters. “It’s 25% without exceptions or exemptions. That’s all countries, no matter where it comes from, all countries.”
Trump later said he would give “great consideration” to Australia’s request for an exemption to the steel tariffs.
The proclamations were extensions of Trump’s 2018 Section 232 tariffs designed to defend American steel and aluminium producers on national security grounds. A White House official stated that the exclusions have reduced the efficacy of these efforts.
Impact Shorts
More ShortsTrump will also enforce a new North American standard requiring steel imports to be “melted and poured” and aluminium to be “smelted and cast” inside the area in order to reduce US imports of minimally processed Chinese and Russian metals.
The directive also applies tariffs on downstream items that employ foreign-made steel, such as fabricated structural steel, aluminium extrusions, and steel strand for pre-stressed concrete, according to a White House official.
As he signed the order at the White House, Trump said he would follow Monday’s action with announcements about reciprocal tariffs on all countries that impose duties on U.S. goods over the next two days, and said he was also looking at tariffs on cars, semiconductor chips and pharmaceuticals.
Asked about threats of retaliation by other countries against his new tariffs, Trump said: “I don’t mind.”
Trump’s trade adviser Peter Navarro said the latest measures would help U.S. steel and aluminum producers and shore up America’s economic and national security.
“The steel and aluminum tariffs 2.0 will put an end to foreign dumping, boost domestic production and secure our steel and aluminum industries as the backbone and pillar industries of America’s economic and national security,” he told reporters.
“This isn’t just about trade. It’s about ensuring that America never has to rely on foreign nations for critical industries like steel and aluminum.”
Trump first targeted steel and aluminum for tariffs in 2018 under a Cold War-era national security law. He later granted several countries exemptions, including Canada, Mexico and Australia, and struck duty-free quota deals for Brazil, South Korea and Argentina based on pre-tariff volumes.
Trump’s successor, Former President Joe Biden, later negotiated similar duty-free quotas for Britain, Japan and the EU.
“We applaud the president for instituting these 25% tariffs on steel imports and getting rid of exclusions, carveouts and quotas that are based on antiquated data,” said Philip Bell, president of the Steel Manufacturers Association.
These were based on 2015-2017 import levels that no longer reflect current market dynamics, Bell said.
Before the proclamations, shares in U.S. steel and aluminum makers jumped, while shares in European and Asian steelmakers fell. The largest sources of U.S. steel imports are Canada, Brazil and Mexico, followed by South Korea and Vietnam, according to government and industry data.
Canada, whose extensive hydropower resources aid its metal production, accounted for 79% of U.S. primary aluminum imports in the first 11 months of 2024.
U.S. trade partners warned the new barriers would hurt U.S. automakers, shipbuilders and other industries.
“Australian steel and aluminum are creating thousands of good-paying American jobs, and are key for our shared defense interests,” Australian Trade Minister Don Farrell said.
U.S. distillers warned that the steel tariffs could prompt the EU to raise duties on American whiskey.
“A 50% tariff on America’s native spirit will have a catastrophic outcome for the 3,000 small distilleries across the United States,” said Chris Swonger, CEO of the Distilled Spirits Council of the United States.
The European Commission said it saw no justification for the tariffs and said President Ursula von der Leyen would meet U.S. Vice President JD Vance in Paris on Tuesday during an AI summit.
In South Korea, the Industry Ministry called in steelmakers to discuss how to minimize the impact of tariffs.
Reciprocal tariffs
Trump also has promised detailed information on Tuesday or Wednesday on his reciprocal tariff plan. He has long complained about the EU’s 10% tariff on auto imports, much higher than the U.S. car rate of 2.5%. However, the U.S. applies a 25% tariff on pickup trucks, a vital source of profit for Detroit automakers like General Motors.
Overall, the U.S. trade-weighted average tariff rate is about 2.2%, according to World Trade Organization data, compared to 12% for India, 6.7% for Brazil, 5.1% for Vietnam and 2.7% for the EU.
Indian Prime Minister Narendra Modi is preparing tariff cuts ahead of a Wednesday meeting with Trump that could boost American exports, Indian government officials said. Trump has previously called India a “very big abuser” on trade, and his top economic adviser Kevin Hassett singled out the country as having “enormously high” tariffs in a CNBC interview.
Trump had already threatened to impose tariffs of 25% on all imports from America’s two largest trading partners, Canada and Mexico, saying they must do more to halt the flow of drugs and migrants across the U.S. border. After some border security concessions, Trump paused the tariffs until March 1.
U.S. data showed that demand for aluminum last year far exceeded domestic production, leaving the country largely reliant on imports.
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