President of the United States Donald Trump has ordered to impose a 25% tariffs on steel and aluminum imports, which means stepping up his efforts to protect those US industries that are of particular importance in the context of the economic aspect of the country’s existence and at the same time are essential from a political point of view.
It is worth noting that Washington’s mentioned measures, which mean an unambiguous tightening of its trade policy strategy, also apply to the United States’ closest allies. In this case, it implies the obvious painful impact of tariffs on the economies of the US partners.
The measures ordered by Donald Trump will be broadly applied to all United States imports of steel and aluminum. In this context, it is worth mentioning that Canada and Mexico are the leading suppliers of metals to the United States. Representatives of the Donald Trump administration said that the mentioned levies are aimed at stopping attempts by countries such as China and Russia to circumvent existing duties. It is also worth noting that tariffs apply, among other things, to finished metal products.
Donald Trump said that the mentioned measures will help to bolster domestic production and bring more jobs to the United States. The US president also warned that tariffs on metals could rise. The new rates will take effect on March 12, at 12:01 am Washington time. The relevant information is contained in proclamations issued by the White House late on Monday evening, February 10.
Donald Trump noted that the tariffs will mean that a lot of businesses are going to be opening in the United States. He made this statement while signing the relevant measures in the Oval Office on Monday.
Donald Trump announced the tariffs on metals about a week after he imposed a 10% duty on all Chinese imports. Economists warn of the likely negative consequences of Washington’s tightening trade policy. According to them, the higher border taxes paid by US importers can trigger an increase in prices for all goods, including groceries and gasoline. Against the background of the implementation of this potential scenario, an obvious fact of economic reality will be the increase in inflationary pressure, which Donald Trump has repeatedly stated the need to suppress as part of his rhetoric during the election campaign. Moreover, it is worth noting that in the United States, consumers are clearly tired of inflation, countering which has been at the center of Washington’s efforts and actions in recent years. Significant progress has been made in this case. In June 2022, inflation in the United States was 9.1%. In December 2024, the corresponding figure was recorded at the 2.9% mark. At the same time, the Federal Reserve’s target is 2%. Most economists warn that Washington’s tightening trade policy, which provides for the intensification of tariff measures, is likely to increase inflation, which will cancel out the progress made in recent years in combating price growth. Donald Trump does not agree with this point of view. In his opinion, tariffs will contribute to the upward dynamic of the United States economy.
Administration officials of Donald Trump said that the levies are part of a broader economic strategy that also includes the implementation of measures such as extended tax cuts and expanded domestic energy production. According to them, the corresponding concept of action will contribute to lowering costs overall.
Goldman Sachs Group experts said that Donald Trump’s plan to impose 25% tariffs on steel and aluminum imports will largely be passed through to US prices. In this context, it was also noted separately that the implementation of the corresponding scenario would become an accomplished fact if no exception was made for any of Washington’s major trading partners.
At the same time, the tightening of the tariff policy of the United States provokes retaliatory measures. On Tuesday, February 11, the European Union and Canada declared their readiness for appropriate measures. Against this background, the risk of a global trade war increases significantly, which will not be limited to the space of mutual relationships between individual countries. It is also obvious that the formation of such a state of affairs will worsen the current geopolitical situation, which demonstrates a consistent deterioration and contains the danger of a fundamental degradation of the system of international cooperation.
It is worth mentioning that the previous tariffs on US steel and aluminum imports were 10%. It is also noteworthy that Donald Trump’s decision provides for the abolition of exceptions for individual countries and quotas. Moreover, in this case, hundreds of thousands of product-specific tariff exclusions for both metals are canceled.
On Tuesday, European Commission President Ursula von der Leyen said unjustified tariffs for the European Union would not go unanswered. In this context, she noted that there would be imposed firm and proportional countermeasures against the United States.
German Chancellor Olaf Scholz said that if the US leaves no other choice to the region, the European Union will respond to the tariffs unanimously. He also separately noted that the EU, as the largest market in the world with a population of 450 million people, has the strength to do this.
According to media reports, in the context of the gradual beginning of the trade and in general economic confrontation currently being observed, Brussels should be ready for quick action against Washington. In 2021, the European Union suspended tariffs on US goods worth about $3 billion. The relevant decision was made after the EU reached an agreement with the administration of former United States President Joe Biden on the import of steel and aluminum. The tightening of Washington’s trade policy increases the likelihood of renewed duties from the European Union towards the US. The relevant measures, which may once again become a fact of economic reality in the context of international cooperation, relate, among other things, to iconic goods, including Harley-Davidson Inc. motorcycles and Levi Strauss & Co. jeans.
The tariffs announced by Donald Trump will affect millions of tons of steel and aluminum imported from Canada, Mexico, Brazil, South Korea, and other countries that had been entering the US duty-free under the carve-outs.
Canadian Prime Minister Justin Trudeau called the trade measures by the United States unacceptable. It is worth noting that Canada accounted for almost 80% of the US primary aluminum imports last year. Justin Trudeau said that Ottawa will seek to highlight the negative impact of the tariffs, which were imposed by the United States. He also noted that Canada will stand up firm and clear retaliatory measures if necessary. Experts have repeatedly warned about the likelihood of retaliatory measures and the negative impact of relevant decisions on the state of affairs in the space of the global economic system.
So far, no statements have been made at the level of official rhetoric that the United States is ready for individual ease in the framework of the practical implementation of tariff policy. Officials even expressed concerns about granting any leeway. However, in this case, it is probably appropriate to characterize such comments as a kind of verbal positioning of the concept of tightening trade policy with an emphasis on the original semantic core of the corresponding idea without clarifications about the nuances, which, most likely, still exist and can be implemented in a practical plane. For example, Donald Trump indicated that he might consider a break for Australia, crediting the country’s import of US-made aircraft.
Against the background of the announcement of new tariffs, value shares of the largest steel and aluminum producers based in the United States showed moderate growth. Alcoa Corp.’s securities gained about 1%. This company is the largest US producer of aluminum. The value of shares of Nucor Corp. showed an increase of 0.5%. This company is the largest steel producer in the United States. At the same time, US equity futures were down 0.2% during mid-day trade in Asia.
It is worth noting separately that Donald Trump also repeated his threat to impose retaliatory tariffs on countries that will make appropriate decisions regarding United States imports. In the relevant context, he underlined that this reaction from Washington will be implemented within the next two days after the mentioned actions of other capitals. Donald Trump also said that his administration would consider imposing levies on cars and semiconductors. Moreover, according to him, the relevant measures may affect other potential sectors.
Donald Trump authorized the new tariffs under Section 232 of the Trade Expansion Act, which gives the president broad authority to impose trade restrictions on domestic security grounds. Mr. Trump used the same power in 2018 when he imposed levies on steel and aluminum during his first term as president. Donald Trump’s statements made on Monday actually revive and expand those tariffs.
It is worth noting that during Mr. Trump’s first presidential term in the United States, there was a brief increase in employment in the manufacturing industry. The corresponding tendency was associated with tax cuts. At the same time, the growth of employment in the manufacturing industry was not a long-term process. This situation began to show changes after Donald Trump imposed tariffs on steel and aluminum in 2018. The trade war between the United States and China, which began during Mr. Trump’s first term as president, was also an impact factor.
In 2019, the first full year after the imposition of the initial tariffs on steel and aluminum, the US actually lost manufacturing jobs. In the broader factory sector, the downturn has begun. Industrial production has shown a decline.
A senior official of the Donald Trump administration said that new measures to tighten Washington’s trade policy were necessary because steel and aluminum exporters abused exceptions under the previous policy, which caused damage to US manufacturers. It is worth noting that this official spoke to media representatives on condition of anonymity.
Donald Trump’s decision to include downstream finished products is an important move. Most likely, this decision will have a significant impact on prices for a large number of consumers in the United States.
In 2018, the Donald Trump administration’s tariffs mainly affected raw steelmaking and primary aluminum production. At the same time, new measures include goods such as extrusions and slabs, which are turned into value-added products needed in everything, including cars, window frames, and skyscrapers. This decision is expected to allow Washington to achieve the state of affairs in the context of trade policy that the most radically oriented proponents of the idea of strict economic protectionism have been striving for for many years. It is unlikely that such decisions and actions will contribute to the development of international trade cooperation. In this case, it makes no sense to even talk about the prospects for the prosperity of the mentioned space of economic processes at the level of theoretical modeling of the potential transformation of the situation.
In Washington, the National Association of Home Builders said tariffs are likely to be a factor impeding Donald Trump’s goal to reduce housing costs and boost supply.
NAHB chairman Carl Harris said that Mr. Trump’s decision to impose 25% levies on imports of all steel and aluminum products into the United States is completely contrary to the mentioned goal. It was noted that in this case, the cost of home building is rising, deterring new development and frustrating efforts to rebuild in the wake of natural disasters.
Moreover, Donald Trump will direct US Customs and Border Protection to strengthen oversight to prevent foreign countries from misclassifying steel products to evade paying tariffs.
It is worth noting that the mentioned actions significantly reproduce the strategy of Mr. Trump, which was implemented during his first presidential term. At that time, he imposed 25% tariffs on steel and 10% on aluminum. Against the background of the implementation of the relevant measures, a decline in US imports of the metals was recorded. As part of the settlement of the situation generated by the mentioned tariff policy, Donald Trump granted duty-free status to several major exporters, including Brazil, Mexico, and Canada. The administration of Joe Biden expanded those exemptions.
So far, there is no definitive understanding of what exactly the countries’ reaction to metal tariffs will be. In this case, what is meant is not rhetoric, which exists only in the form of statements of certain intentions, but concrete actions in a practical plane. On Monday, new retaliatory levies from China over 10% tariffs on goods went into effect. Last week, Donald Trump delayed until March 4 the imposition of a 25% tax on products imported from Canada and Mexico.
François-Philippe Champagne, Canada’s minister of Innovation, Science and Industry, said that tariffs on steel and aluminum for this country, which is the closest ally of the United States, would be totally unjustified. Also in this context, it was separately noted that Canadian steel and aluminum support the main industries in the US, including the defense sector, shipbuilding, energy, and automotive.
It is worth noting that the United States is heavily dependent on aluminum imports to meet domestic demand. Many of those supplies come from Canada, the United Arab Emirates, and China. Morgan Stanley data shows that net aluminum imports exceeded 80% in 2023.
It is worth noting that steel shipped from other countries has a smaller share in total consumption in the United States. At the same time, this fact does not negate that the US aerospace, automotive, and energy sectors rely on the import of special grades of steel.
The United States’ opponents overseas have argued that the widespread tariffs violate global trade rules and are an affront to US allies abroad.
Donald Trump decided on levies on steel and aluminum ahead of the visit of Indian Prime Minister Narendra Modi, which will take place this week. The mentioned South Asian country is a supplier of steel to the United States. The lobbying group Indian Steel Association has called on the government to take diplomatic action to secure exemption from US trade restrictions.
According to media reports, for Donald Trump, the revival of steel production in the United States is a matter of principle. Appropriate actions are also of particular political importance in Rust Belt states such as Ohio and Pennsylvania. Recently, the mentioned regions have been facing such a negative reality circumstance as an erosion of industrial manufacturing jobs. The United Steelworkers union, which has significant influence in the specified states, endorsed Kamala Harris, Donald Trump’s opponent, in the United States presidential elections last fall. At the same time, many local chapters of the specified organization backed Mr. Trump.
Last week, Donald Trump said he would continue to block Japan’s Nippon Steel Corp. bid to take over the United States Steel Corp. It is worth noting that the opponent of this deal is the steelworkers’ union. After meeting with Japanese Prime Minister Shigeru Ishiba, Donald Trump said that Nippon Steel could make financial injections into the US steel producer, which under this scenario would continue to be an American company with significant foreign backing.
The American Chamber of Commerce to the EU, which represents the interests of the United States companies operating in Europe, criticized Donald Trump’s decision on tariffs on aluminum and steel. This organization stated that the mentioned measures are detrimental to jobs, prosperity, and security on both sides of the Atlantic Ocean. The statement from the American Chamber of Commerce to the EU also separately noted that the damage would extend beyond the steel and aluminum sectors. In this case, it is argued that the negative impacts will affect all businesses that rely on the mentioned materials throughout the supply chain.
It is not yet known which configuration of the global trade space, which is one of the most important parts of the world’s economy, will be formed as a result of the tariffs imposed by the United States and the likely retaliatory measures. At the same time, it is obvious that the continuation of the materialization of the scenario that has already begun to fill reality will contribute to the deterioration of the condition of global cooperation. It is possible that as the relevant state of affairs continues to scale, a situation will form that can be symbolically described as a struggle for survival. The realization of the corresponding probability, which is still only theoretical, will mean a narrowing of the space of international trade cooperation and a kind of fragmentation of the global economy according to the block principle. In this case, the economies of individual countries or groups of countries will rely heavily on their own capabilities, potential, and margin of safety. In the context of such a situation, the United States has generally good prospects. However, in this case, it means an indicator based on the principle of comparison. The condition of a particular system, which is better than the situation typical at a particular time for another system, does not mean an ideal state of affairs. For this reason, it can be assumed that the United States economy will experience a period of deterioration in global trade interaction with indicators exceeding those of other countries, but it will still not be possible to avoid negative consequences. It is also worth mentioning that in recent decades, globalization has been a kind of basic and fundamental principle of the co-existence of the countries of the world. The corresponding concept of arranging the common being, including in the economic dimension, has formed a supply chain on which production and many other processes in most states depend. The fragmentation of the system of global interaction will be a painful blow to the already familiar order of things, which will have consequences, including specific material implications. Such gloomy prospects for the further dynamic of the world’s economy against the background of the current geopolitical tensions, which do not signal an imminent weakening, are realistic, but at the same time do not belong to the category of what can be called inevitable scenarios of the future. It is possible that certain agreements on constructive cooperation will be reached in the face of the expected increase in mutual tariffs. There is also a possibility that the deterioration of international economic cooperation will not reach a kind of point of no return, after crossing which systemic degradation begins.
