On Monday, Donald Trump announced 25% tariffs on foreign steel and aluminum, escalating his contentious attempt to boost the US economy by raising taxes on imports from other countries.
The modified US duties will be enforced “without exceptions or exemptions,” the president declared, dashing countries’ hopes of avoiding them.
During his first term as president, Trump imposed steep tariffs on foreign steel and aluminum. The action announced Monday night ends exemptions granted to specific countries and raises the duty rate on aluminum.
According to a White House official, the changes will not take effect until March 4, raising the possibility that the Trump administration will broker deals with governments seeking relief.
Countries, including Australia, have already made their cases, and Trump later stated that he would give “great consideration” to Australia’s request for an exemption from steel tariffs due to the country’s trade deficit with the United States.
Trump first hinted at his latest tariff actions on Sunday, adding that he would also announce a new set of reciprocal tariffs later in the week, prompting warnings of retaliation from trade partners.
“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,” stated Peter Navarro, Trump’s top trade adviser, to reporters.
“It’s not just about trade. It’s about ensuring that America never has to rely on other countries for critical industries like steel and aluminum.”
Trump will also impose a new North American standard requiring steel imports to be “melted and poured” and aluminum to be “smelted and cast” within the region, reducing US imports of minimally processed Chinese and Russian metals that avoid other tariffs.
Trump and his allies, who repeatedly claimed that tariffs could “Make America great again” during their campaign for the White House, believe that higher taxes on imported steel and aluminum will help shore up the US industrial heartland.
The US president stated that he would announce plans to impose reciprocal tariffs on other countries within the next two days. He signed two proclamations as he spoke to reporters in the Oval Office: one ending Joe Biden’s waivers of steel and aluminum tariffs imposed during his first term, and the other raising duties on both metals to 25%.
He also mentioned the possibility of future US tariffs on cars, semiconductor chips, and pharmaceuticals from around the world.
When asked about the possibility of other countries retaliating against US tariffs, Trump responded, “I don’t mind.”
Canada’s industry minister stated that the US tariffs were “completely unjustified,” as Canadian steel and aluminum support key US industries such as defense, shipbuilding, energy, and automobiles.
“This is making North America more competitive and secure,” said Francois-Philippe Champagne in a statement. “We are consulting with our international partners as we work through the details. “Our response will be clear and calibrated.”
The European Commission said there was no justification for the tariffs, and President Ursula von der Leyen planned to meet with US Vice President JD Vance in Paris on Tuesday during an AI summit.
In South Korea, the industry ministry met with steelmakers to discuss how to mitigate the impact of tariffs.
Ahead of a meeting with Trump on Wednesday, Indian Prime Minister Narendra Modi was preparing to offer to reduce Indian tariffs in a number of sectors, potentially increasing US exports to the country, according to government officials in Delhi.
Trump has previously referred to India as a “very big abuser” of trade, and in a CNBC interview, his top economic adviser Kevin Hassett cited the country’s “enormously high” tariffs.
This latest round of tariffs differs from the one imposed by the White House on China last week, which included an additional 10% duty on all goods traveling from the country to the United States. He also threatened Canada and Mexico with the same blanket tariffs at a higher rate of 25%, but agreed to a one-month delay before acting.
Trump signed proclamations raising the tariff rate on aluminum imports to 25% from 10% in 2018 to help the struggling sector. His action reinstates a 25% tariff on millions of tonnes of steel and aluminum imports that had previously entered the US duty-free due to quota agreements, exemptions, and thousands of product exclusions.
The proclamations were extensions of Trump’s 2018 section 232 national security tariffs designed to protect steel and aluminum producers. A White House official stated that the exemptions had reduced the effectiveness of these measures.
About a quarter of the steel used in the United States comes from outside the country, with Canada, Brazil, and Mexico being the leading suppliers. South Korea, Japan, and Germany are also major markets.
China, which was hit with a 25% steel tariff during Trump’s first administration and maintained by Joe Biden, is not a major steel exporter to the United States. However, it is the world’s largest exporter of steel, dominating the global market with typically lower-cost products. Some countries then export their own steel products, at higher prices, to markets such as the United States.
Trump’s obsession with tariffs has alarmed economists, who warn that imposing them could jeopardize his repeated promises to lower prices for millions of Americans.
However, Trump has defended his strategy, claiming that they could generate “trillions” of dollars for the US economy – and that the mere threat of import duties can persuade countries to bend to his will. “Tariffs are very powerful, both economically and in getting everything else you want,” he said the previous week.
