Trump Announces 25% Flat Tariff on Steel and Aluminum Imports

What Happened?

President Donald Trump's moves surrounding global tariffs continue as he announced a raise on steel and aluminum imports to a flat 25%.

The decision pivots from Trump's previous 10% rate in hopes of aiding the struggling industries in the U.S., according to reports.

He detailed the move 'without exceptions or exemptions' as some experts believe may risk sparking a multi-front trade war.

The measure, set to take effect March 12, would reportedly eliminate country exceptions, quota deals, and hundreds of thousands of product-specific tariff exclusions for both metals.

'It’s going to mean a lot of businesses are going to be opening in the United States,' Trump said Monday in the Oval Office as he signed the order.

He added, 'If made in the United States however... there is no tariff. Zero.'

This comes not long after China announced a series of retaliatory tariffs on the U.S. took effect on Feb. 10 after Trump issued a 10% levy on Chinese products.

Trump's previous conversations with the leaders of Mexico and Canada resulted in a one-month pause on a 25% tariff levy after agreeing to cooperate with various requested border reinforcement measures.

Both Prime Minister Justin Trudeau and President Claudia Sheinbaum had initially announced U.S. retaliatory measures after later reversing course.

Why it Matters

According to Bloomberg, experts warn Trump’s plan to impose 25% tariffs on steel and aluminum imports without exemptions for major trading partners will largely be passed through to U.S. prices.

European Commission President Ursula von der Leyen deeply regretted the U.S. decision.

'Tariffs are taxes - bad for business, worse for consumers,' von der Leyen said Tuesday in a statement. 'Unjustified tariffs on the EU will not go unanswered — they will trigger firm and proportionate countermeasures.' 

German Chancellor Olaf Scholz also issued a statement that read, 'If the United States leaves us no other choice, then the European Union will act together as the largest market in the world.'

Scholz added that he hopes the EU is speared from 'the misguided path of tariffs and counter-tariffs.'

EU allies previously reached a deal under the Biden administration to roll back tariffs on about $3 billion of American products in 2021.

The deal was reportedly aimed at easing trans-Atlantic trade tensions that had worsened under President Trump's first term in office in 2019.

Trump’s initial steel and aluminum tariffs reportedly lost manufacturing jobs and the broader factory sector entered a slump.

The new tariffs, authorized by Trump, follow his previous move involving Section 232 of the Trade Expansion Act.

This act allows the president to adjust imports into the U.S. in such quantities or under circumstances that threaten national security.

In 2018, China and the U.S. engaged in an escalating trade war when Trump repeatedly raised tariffs on Chinese goods during his first term.

Presently, Trump has acknowledged short-term pain, 'but long term, the United States has been ripped off by virtually every country in the world.'

According to American Iron and Steel Institute data, steel imports accounted for about 23% of U.S. steel consumption in 2023.

Canada, Brazil, and Mexico were listed as being the largest suppliers.

How it Affects You

Consumer prices are key focuses that Americans are hoping to be eased in the months to come without trading war escalations.

The president aims to implement these measures to bring significant investment back to U.S. Steel.

Experts have stated that any major shake-up could result in lower GDP growth everywhere and increase U.S. inflation.

That includes Trump's goal of reducing housing costs and boosting supply.