President Donald Trump declared plans to impose a 25% tariff on all steel and aluminum imports, broadening his trade agenda and raising concerns among key US trading partners.
Speaking aboard Air Force One on Sunday, Trump confirmed that the tariffs would apply to all countries, including Mexico and Canada, without specifying when they would take effect.
Trump also hinted at introducing reciprocal tariffs on countries taxing US imports, noting these measures would be implemented “almost immediately” after an announcement. However, he provided no further details.
Possible impact of steel and aluminum tariffs
The US heavily relies on aluminum imports, primarily from Canada, the UAE, and China, which account for most of its demand.
Steel imports, though a smaller portion of consumption, are critical for industries requiring specialty grades not produced domestically, such as energy companies involved in wind development and oil drilling.
Metal markets in Asia showed a steady response to the announcement early Monday. Iron ore prices rose less than 1% in Singapore, while aluminum futures on the London Metal Exchange saw marginal gains. US aluminum futures on Comex added 0.4% in light trading.
Canada, Mexico, Brazil, and South Korea are the leading suppliers of steel to the U.S. Some companies, particularly in the oil sector, had secured exclusions from previous tariffs during Trump’s first term.
However, it remains unclear whether imports from China will face double tariffs, given the existing 10% duties on Chinese goods.
China has responded with retaliatory measures targeting $14 billion worth of US imports, set to take effect on Monday.
These targeted measures are more measured compared to Trump’s broader tariff plans.
Trump’s tariffs negotiations
Trump’s tariff strategy has often served as a bargaining chip. He delayed tariffs on imports from Mexico and Canada to March following their proposals for increased border security.
In January, his threat of a 25% tariff on Colombia also worked as it forced the latter to accept deportees.
Additionally, the president has threatened duties on goods from the EU, including pharmaceuticals, oil, and semiconductors, while maintaining a mix of hardline rhetoric and willingness to negotiate with China.
The president’s use of tariffs aligns with his broader economic goals of reducing trade deficits and generating revenue to support his tax initiatives.
However, economists warn these measures could increase costs for manufacturers, raise consumer prices, and strain trade relations without achieving the expected revenue.
Mexico and Canada tariffs are still on the cards
Trump, in a Fox News interview, criticized Canada and Mexico for their insufficient measures to address border security, drug trafficking, and migration ahead of a looming March 1 tariff deadline.
Trump reiterated his threat to impose 25% tariffs on all imports from America’s two largest trading partners if more robust actions are not taken.
Trump had previously delayed the tariffs until March 1 after initial border security concessions from both nations.
Mexico pledged to deploy 10,000 National Guard troops to its borders, while Canada committed to deploying new technology, additional personnel, and implementing anti-fentanyl measures.
However, Trump made it clear these efforts have not met his expectations.
Asked if Mexico’s and Canada’s actions were adequate, Trump responded, “No, it’s not good enough. Something has to happen. It’s not sustainable, and I’m changing it.”
He did not elaborate on specific steps the two countries would need to take to avoid the tariffs.
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