Trump to announce 25% steel and aluminium tariffs in latest trade escalation

ABOARD AIR FORCE ONE – President Donald Trump has said that he will introduce new 25 per cent tariffs on all steel and aluminium imports into the US, which would come on top of existing metals duties, in another major escalation of his trade policy overhaul.

Mr Trump, speaking to reporters on Air Force One on Feb 9, said he would announce the new metals tariffs on Feb 10.

He also said he would announce reciprocal tariffs on Feb 11 or 12 – to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each country.

“And very simply, it’s – if they charge us, we charge them,” he said of the reciprocal tariff plan.

According to government and American Iron and Steel Institute data, the largest sources of US steel imports are Canada, Brazil and Mexico, followed by South Korea and Vietnam.

By a large margin, hydro power-rich Canada is the largest supplier of primary aluminium metal to the US, accounting for 79 per cent of total imports in the first 11 months of 2024.

“Canadian steel and aluminium support key industries in the US – from defence, shipbuilding and auto,” Canadian Innovation Minister Francois-Philippe Champagne posted on X.

“We will continue to stand up for Canada, our workers, and our industries.”

Mr Trump also said that while the US government would allow Japan’s Nippon Steel to invest in US Steel, it would not allow this to become a majority stake.

“Tariffs are going to make it very successful again, and I think it has good management,” he said of US Steel.

Nippon Steel declined to comment on the latest announcements from Mr Trump.

Quotas

Mr Trump, during his first term, imposed tariffs of 25 per cent on steel and 10 per cent on aluminium, but later granted several trading partners duty-free exemptions, including Canada, Mexico and Brazil. Mexico is a major supplier of aluminium scrap and aluminium alloy.

Former president Joe Biden later negotiated duty-free quota arrangements with Britain, the European Union and Japan. It was not immediately clear from Mr Trump’s announcement what will happen to those exemptions and quota arrangements.

“Quebec exports 2.9 million tons of aluminium to (the US), that is, 60 per cent of their needs. Do they prefer to get supplies from China?” Mr Francois Legault, Premier of Quebec, said on X.

“All this shows that we must begin to renegotiate our free trade agreement with the United States as soon as possible and not wait for the review planned for 2026. We must put an end to this uncertainty.”

Steel mill capacity usage jumped to levels above 80 per cent in 2019 after Mr Trump’s initial tariffs, but has fallen since then as China’s global dominance of the sector has pushed down steel prices. A Missouri aluminium smelter revived by the tariffs was idled in 2024 by Magnitude 7 Metals.

Mr Kevin Dempsey, president and chief executive of the American Iron and Steel Institute, said the industry trade group welcomed Mr Trump’s commitment to a strong American steel industry.

“We look forward to working closely with the President and his administration to implement a robust and reinvigorated trade agenda to address the many foreign market-distorting policies and practices that create an unlevel playing field for American steelmakers.”

Matching rates

Mr Trump said he would hold a news conference on Feb 11 or 12 to provide detailed information on the reciprocal tariff plan, adding that he first revealed on Feb 7 that he was planning reciprocal tariffs to ensure “that we’re treated evenly with other countries”.

The US President has long complained about the EU’s 10 per cent tariffs on auto imports being much higher than the US car rate of 2.5 per cent. He frequently states that Europe “won’t take our cars” but ships millions west across the Atlantic every year.

The US, however, enjoys a 25 per cent tariff on pickup trucks, a vital source of profits for Detroit automakers General Motors, Ford and Stellantis’ US operations.

The US trade-weighted average tariff rate is about 2.2 per cent, according to World Trade Organisation data, compared with 12 per cent for India, 6.7 per cent for Brazil, 5.1 per cent for Vietnam, and 2.7 per cent for EU countries.

Mr Chris Swonger, chief executive of the Distilled Spirits Council of the United States, expressed concern that Mr Trump’s new steel tariffs would lead to the EU reimposing retaliatory duties on American whiskey and raising them to 50 per cent.

“We are urging that the US and EU move swiftly to find a resolution. Our great American whiskey industry is at stake. A 50 per cent tariff on America’s native spirit will have a catastrophic outcome for the 3,000 small distilleries across the United States.”

Border moves

In a separate Fox News interview, Mr Trump said Canada’s and Mexico’s actions to secure their US borders and halt the flow of drugs and migrants are insufficient ahead of a March 1 tariff deadline.

He has threatened to impose tariffs of 25 per cent on all Mexican and Canadian imports unless America’s two largest trading partners take stronger actions.

He paused the tariffs until March 1 after some initial border security concessions from the two countries, with Mexico pledging to add 10,000 National Guard troops to its border and Canada deploying new technology and personnel, and taking new anti-fentanyl steps.

Asked whether Mexico’s and Canada’s actions were good enough, Mr Trump replied: “No, it’s not good enough. Something has to happen, it’s not sustainable, and I’m changing it.”

He did not say what Canada and Mexico needed to do to avoid broad tariffs on March 1. REUTERS