U.S. President Donald Trump revealed on Sunday that he will introduce new 25% tariffs on steel and aluminum imports into the U.S., marking a significant escalation in his trade policy overhaul. Speaking to reporters aboard Air Force One en route to the NFL Super Bowl in New Orleans, Trump confirmed that the new metals tariffs will be announced on Monday.
The move builds on existing tariffs and is part of a broader strategy to protect domestic industries and address trade imbalances. Trump also announced plans to introduce reciprocal tariffs on Tuesday or Wednesday, which will take effect almost immediately. These reciprocal tariffs will apply to all countries and match the tariff rates levied by each nation.
Reciprocal Tariffs to Match Foreign Trade Policies
Trump explained the rationale behind the reciprocal tariffs, stating, “And very simply, it’s, if they charge us, we charge them.” This approach aims to ensure that U.S. trade policies are aligned with those of its trading partners, creating a level playing field for American industries.
The largest sources of U.S. steel imports are Canada, Brazil, and Mexico, followed by South Korea and Vietnam, according to government and American Iron and Steel Institute data. Canada, in particular, is the largest supplier of primary aluminum metal to the U.S., accounting for 79% of total imports in the first 11 months of 2024.
Canada Responds to U.S. Tariff Announcement
Canadian Innovation Minister François-Philippe Champagne responded to the announcement on X, emphasizing the importance of Canadian steel and aluminum to U.S. industries. “Canadian steel and aluminum support key industries in the U.S. from defense, shipbuilding, and auto,” Champagne wrote. “We will continue to stand up for Canada, our workers, and our industries.”
Nippon Steel’s Investment in U.S. Steel Limited
Trump also addressed the proposed investment by Japan’s Nippon Steel in U.S. Steel, stating that while the U.S. government would allow the investment, it would not permit Nippon Steel to acquire a majority stake. “Tariffs are going to make it very successful again, and I think it has good management,” Trump said of U.S. Steel. Nippon Steel declined to comment on the latest announcements.
Questions Surround Existing Tariff Exemptions and Quotas
During his first term, Trump imposed tariffs of 25% on steel and 10% on aluminum but later granted duty-free exemptions to several trading partners, including Canada, Mexico, and Brazil. Mexico is a major supplier of aluminum scrap and aluminum alloy. Former President Joe Biden negotiated duty-free quota arrangements with Britain, the European Union, and Japan.
This news is pretty recent therefore, it is still unclear how Trump’s latest announcement will impact these existing exemptions and quota arrangements. The new tariffs and reciprocal measures are expected to reshape global trade dynamics and spark reactions from key trading partners.
