Trump announces 25% tariffs on steel and aluminium imports, plans reciprocal tariffs

US to impose new trade tariffs on metal imports

In a major escalation of his trade policy, US President Donald Trump announced that starting Monday, the United States will impose a 25% tariff on all steel and aluminium imports. Additional metal duties are also expected to be disclosed later in the week.

Speaking aboard Air Force One on Sunday while traveling to the NFL Super Bowl in New Orleans, Trump revealed that he plans to introduce reciprocal tariffs as early as Tuesday. These tariffs would take effect almost immediately.

However, Trump did not specify which countries would be targeted but emphasized that the US would match the tariff rates levied by other nations. “And very simply, if they charge us, we charge them,” he stated, reinforcing his commitment to fair trade policies.

Previous tariffs and policy changes

During his first White House term (2016-2020), Trump imposed a 25% tariff on steel and 10% on aluminium but later granted duty-free quotas to several trading partners, including Canada, Mexico, and Brazil. Former President Joe Biden extended these exemptions to Britain, Japan, and the European Union.

Despite these measures, US steel mill capacity utilization has declined in recent years, prompting Trump to revisit and expand the tariff policy in his second term.

Impact on major trading partners: Canada, Mexico, and more

According to official data:

• Canada, Brazil, and Mexico are the largest suppliers of US steel imports, followed by South Korea and Vietnam.
• Canada is the primary supplier of aluminium, accounting for 79% of total imports in the first 11 months of 2024.
• Mexico is a major supplier of aluminium scrap and aluminium alloy.

With these new tariffs, Canada and Mexico could face economic challenges, given their heavy reliance on the US metals market.

Trump’s push for fair tariff rates

Trump stated that he would hold a press conference on Tuesday or Wednesday to provide details on his reciprocal tariff plan. He reiterated his belief that other nations impose higher tariffs on American goods, particularly in the auto sector.

For instance:

• The EU imposes a 10% tariff on US car imports, while the US only charges a 2.5% tariff on European cars.
• Trump has frequently criticized Europe for restricting American auto exports while shipping millions of vehicles to the US.

However, the US maintains a 25% tariff on pickup trucks, a crucial profit source for American automakers like General Motors, Ford, and Stellantis’ US operations.

Global trade tariff comparisons

According to World Trade Organization (WTO) data, the US trade-weighted average tariff rate is 2.2%, significantly lower than:

• India: 12%
• Brazil: 6.7%
• Vietnam: 5.1%
• European Union: 2.7%

Trump’s new tariff strategy is expected to reshape US trade relations, potentially leading to negotiations or retaliatory measures from impacted nations. The upcoming press conference will shed further light on the administration’s trade policies moving forward.

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