President Donald Trump’s tariffs on steel and aluminium imports have taken effect, ending all exemptions and imposing a 25% duty.
While Trump argues this move will boost US production, critics warn it will raise consumer prices and hurt industries reliant on metal imports.
The American Iron and Steel Institute welcomed the move, with president Kevin Dempsey stating, “AISI applauds the president’s actions to restore the integrity of the tariffs on steel and implement a robust and reinvigorated program to address unfair trade practices.”
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The European Union (EU) announced counter-tariffs on €26 billion ($28.3 billion) worth of US goods. The UK’s Trade Minister, Jonathan Reynolds, warned that “all options were on the table.” Australia’s Prime Minister, Anthony Albanese, called the tariffs “entirely unjustified,” adding, “It’s against the spirit of our two nations’ enduring friendship.” Despite this, Australia will not impose retaliatory duties.
Canada, the largest exporter of steel and aluminium to the US, plans to retaliate but is “not looking to escalate tensions,” according to Energy Minister Jonathan Wilkinson. Unlike 2018, when carve-outs were granted, this time, the Trump administration has ruled out exemptions.
Industries reliant on imported metals are bracing for higher costs. Michael DiMarino, who runs aerospace parts manufacturer Linda Tool, said, “If I have higher prices, I pass them on to my customers. They have higher prices, they pass it on to the consumer.” The American Automotive Policy Council warned that revoking exemptions “will add significant costs” to car manufacturers.
Economist Bill Reinsch noted, “It protects [the steel and aluminium] industries but hurts downstream users of their products by making them more expensive.”
Stock markets reacted sharply. The S&P 500 dropped 2.7% on Monday, its worst fall since December, with further declines on Tuesday. The UK’s FTSE 100, France’s Cac 40, and Germany’s Dax also fell.
Oxford Economics downgraded its US growth forecast from 2.4% to 2%, stating, “Despite the downgrade, we still expect the US economy to outperform the other major advanced economies over the next couple of years.”
Trump initially threatened to double tariffs on Canadian steel and aluminium to 50% but backed down after Ontario suspended planned 25% electricity charges on US exports. However, Canada remains subject to the 25% tariffs, keeping tensions high.
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