Donald Trump said he would on Monday impose 25 per cent tariffs on all steel and aluminium imports, expanding his trade conflicts to the metals sector in a new burst of protectionism from Washington.
The US president made the announcement during a briefing with reporters as he flew from his Mar-a-Lago estate in Florida to attend the Super Bowl in New Orleans on Sunday evening.
In addition to the measures on steel and aluminium products, Trump said he would later in the week unveil new reciprocal tariffs targeting imports from a wide range of countries that impose levies on US exports.
The promised tariffs on steel and aluminium come as Trump has launched his second term with an aggressive trade policy that has rattled global currency markets, sparked fears of a renewed burst of US inflation and targeted America’s largest trading partners.
Trump last week came within hours of setting 25 per cent tariffs on imports from US neighbours Canada and Mexico, only to offer them a 30-day reprieve. But the administration has pressed ahead with 10 per cent tariffs on Chinese imports, which triggered retaliation from Beijing that took effect on Sunday.
Canada, China and Mexico are the biggest exporters to the US of steel and aluminium products, but Trump’s proposed levies would potentially ensnare countries from Brazil to Germany to South Korea.
Tariffs on metals imports have been championed by some US trade unions as well as domestic producers, but they risk raising input costs for a wide range of US manufacturers. In 2023, the US imported $82.1bn of steel and iron and $27.4bn of aluminium, while exporting $43.3bn of steel and iron and $14.3bn of aluminium.
Responding to Trump’s promise of steel and aluminium tariffs, the European Commission said: “We will react to protect the interests of European businesses, workers and consumers from unjustified measures,” adding that it had not received any official notification of new levies.
Trump took aim at the metals industry during his first term, imposing a 25 per cent tariff on steel and 10 per cent on aluminium, before subsequently granting exemptions to several trading partners, including Canada and Mexico.
The EU retaliated to Trump’s 2018 metals tariffs by imposing levies on a series of US imports, including bourbon whiskey, Harley-Davidson motorcycles and motor boats.
Joe Biden later reached an agreement with the EU, replacing the tariffs with a quota system, but that also allowed for the reimposition of duties this year if talks between the sides failed to make progress.
Following Trump’s latest metals tariff plan, the dollar rose 0.1 per cent on Monday against a basket of currencies including the euro, yen and pound. Aluminium traded on the London Metal Exchange was up 0.4 per cent to $2,639 per tonne.
Shares in South Korean steelmakers Hyundai Steel and Posco Holdings fell 2 per cent and 0.8 per cent respectively, underperforming the Kospi benchmark index.
Shares in ArcelorMittal, one of Europe’s largest producers, dropped 2.5 per cent.
Seoul’s Ministry of Industry, Trade and Energy held an emergency meeting with steel industry executives on Monday as they raced to find more details. “We will jointly respond actively to minimise the impact on our companies,” it said.
Australia’s Prime Minister Anthony Albanese said his country’s companies “have significant investments in [the] US steel industry creating thousands of jobs in both the US and in Australia”.
“We will continue to make the case for Australia’s national interest with the US administration,” Albanese said.
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The steel industry has historically been a lightning rod for trade tensions, with several nations last year introducing levies against imports. The US tripled its tariffs on Chinese steel last year, while the EU launched an anti-dumping investigation into Chinese tin-coated steel products. Mexico and Brazil also raised tariffs.
Trump’s latest pledge comes as the White House has said it will block Nippon Steel’s takeover of US Steel following Joe Biden’s decision to do the same.
But Trump has said he would work on allowing a large investment, though not a majority stake, in the Pennsylvania-based producer by its Japanese rival, and insisted that tariffs would help. “Tariffs are going to make [US Steel] very successful. And I think it has good management,” Trump said.
Shares in Nippon Steel were down 0.4 per cent in Tokyo on Monday.
Trump did not say how exactly he intended to apply the reciprocal tariffs he promised to announce in the coming days.
“Very simply, if they charge us, we charge them,” he said.
Additional reporting by Sam Learner in New York, Arjun Neil Alim in Hong Kong, Nic Fildes in Melbourne, Song Jung-a in Seoul, Sylvia Pfeifer in London and Andy Bounds in Brussels
