Higher US tariffs on steel, aluminium kick in as deadline for ‘best’ offers arrives

WASHINGTON – Washington doubled its tariffs on steel and aluminium imports on June 4, when President Donald Trump’s administration also expects trading partners to make “best offers” to avoid other punishing import levies from taking effect in early July.

Mr Maros Sefcovic, the trade negotiator for the European Union, met US Trade Representative Jamieson Greer in Paris on June 4, with the 27-nation bloc set to make its case for cutting or eliminating threatened tariffs on European imports.

Late on June 3, Mr Trump signed an executive proclamation that puts into effect from the next day a hike in the tariffs on imported steel and aluminium to 50 per cent from the 25 per cent rate introduced in March.

“We started at 25 and then after studying the data more, realised that it was a big help, but more help is needed. And so that is why the 50 is starting tomorrow,” White House economic adviser Kevin Hassett said in explaining the move at a steel industry conference in Washington on June 3. The increase comes into effect at 12.01 am (12.01pm in Singapore).

The increase applies to all trading partners except Britain, the only country so far that has

struck a preliminary trade agreement

with the US during a 90-day pause on a wider array of Trump tariffs.

The rate for steel and aluminium imports from the UK – which does not rank among the top exporters of either metal to the US – will remain at 25 per cent until at least July 9.

About a quarter of all steel used in the US is imported, and Census Bureau data shows the increased levies will hit the closest US trading partners – Canada and Mexico – especially hard. They rank No. 1 and 3, respectively, in steel shipment volumes to the US.

Canada is even more exposed to the aluminium levies as the top exporter to the US by far at roughly twice the rest of the top 10 exporters’ volumes combined. The US gets about half of its aluminium from foreign sources.

Prime Minister Mark Carney’s office said Canada was “engaged in intensive and live negotiations to have these and other tariffs removed”.

Mexico’s Economy Minister Marcelo Ebrard reiterated that the tariffs are unsustainable and unfair, especially given that the country imports more steel from the US than it exports there.

“It makes no sense for the United States to levy a tariff on a product in which you have a surplus,” he said, adding that Mexico would on June 6 seek an exemption from the increase.

The increase in the levies jolted the market for both metals this week, especially for aluminium, which has seen price premiums more than double so far in 2025. With little current capacity to increase domestic production, import volumes are likely to be unaffected unless the price increases undercut demand.

‘Best offer’ due date

June 4 is also when the White House would like trading partners to propose deals that might help them avoid Mr Trump’s hefty “reciprocal” tariffs on imports across the board from taking effect in five weeks.

US officials have been in active talks with a number of countries since Mr Trump announced a pause on those tariffs on April 9, but to date only the UK deal has come to fruition. Even that agreement, which provided the basis for the carve-out from the metals tariffs, is more of a preliminary framework for more talks.

Reuters reported on June 2 that the US Trade Representative was asking countries to list their best proposals in a number of key areas, including tariff and quota offers for purchase of US industrial and agricultural products and plans to remedy any non-tariff barriers.

In turn, the letter promises answers “within days” with an indication of a “landing zone,” including what tariff rates countries can be expected to be saddled with after a 90-day pause on the tariffs expires on July 8.

At issue for most trading partners is whether they retain the current baseline rate of 10 per cent on most exports to the US after that date, or something sharply higher in many cases.

Separately, alarm over China’s hold on the critical minerals market is growing as global automakers joined US counterparts to complain that its restrictions on exports of rare earth alloys, mixtures and magnets could cause production delays.

China’s decision in April to suspend exports of a wide range of rare earths and related magnets has upended the supply chains central to automakers, aerospace manufacturers, semiconductor companies and military contractors around the world.

Uncertainty around US trade policy is creating havoc for businesses around the world.

On June 4, French spirits group Remy Cointreau abandoned its 2030 sales growth ambitions, saying tariffs, slow US sales and high uncertainty could derail its plans for this financial year and beyond.

Austrian speciality steelmaker Voestalpine also warned that tariffs were likely to dent its earnings in the current financial year, while German engineering lobby group VDMA blamed uncertainty caused by Mr Trump’s tariff policies for a 6 per cent drop in orders that its members reported in May. REUTERS