Trump announces 25% tariffs on foreign steel and aluminum

Donald Trump announced 25% tariffs on foreign steel and aluminum on Monday, ramping up his controversial bid to boost the US economy by hiking taxes on imports from overseas.

“The steel and aluminum tariffs 2.0 will put an end to foreign dumping, boost domestic production and secure our steel and aluminum industries as the backbone and pillar industries of America’s economic and national security,” he told reporters.

“This isn’t just about trade. It’s about ensuring that America never has to rely on foreign nations for critical industries like steel and aluminum.”

The US president first broached the steel and aluminum action on Sunday, adding that he would also announce a further set of reciprocal tariffs later in the week, drawing warnings of retaliation from trade partners.

The tariffs will ensure that “American producers can compete on a level playing field again,” a White House official told Reuters.

Trump and his allies, who repeatedly claimed that tariffs could “Make America Great Again” when fighting to regain the White House, believe that higher taxes on imported steel and aluminum will help shore up US industrial heartlands.

Trump said he would announce plans to impose reciprocal tariffs on other countries over the next two days. He signed two proclamations as he spoke to reporters in the Oval Office: one ending waivers granted by Joe Biden to steel and aluminum tariffs instituted during his first term and the other raising duties on both metals to 25%. Trump said he was also looking at tariffs on cars, semiconductor chips and pharmaceuticals.

Asked about the possibility of other countries retaliating against US tariffs, Trump said: “I don’t mind.”

This latest wave of tariffs is different to the one imposed by the White House on China last week, which hit all goods traveling from the country to the US with an additional 10% duty. He also threatened Canada and Mexico with the same blanket tariffs, at higher a rate of 25%, only to agree a one-month delay before pulling the trigger.

Trump signed proclamations that raised the tariff rate on aluminum imports to 25% from the previous 10% that he imposed in 2018 to aid the struggling sector. His action reinstates a 25% tariff on millions of tonnes of steel imports and aluminum imports that had been entering the US duty-free under quota deals, exemptions and thousands of product exclusions.

The proclamations were extensions of Trump’s 2018 section 232 national security tariffs to protect steel and aluminum makers. A White House official said the exemptions had eroded the effectiveness of these measures.

About a quarter of steel used in the US is from overseas, with Canada, Brazil and Mexico as the top providers. South Korea, Japan and Germany are also key markets.

China, hit by a 25% steel tariff during Trump’s first administration that was maintained under Joe Biden, is not a significant exporter of steel to the US. But it is the largest exporter of steel to the world, dominating the global market with typically cheaper products. Some countries then export their own steel products, at higher rates, to markets including the US.

Trump’s fixation with tariffs has alarmed economists, who have warned their imposition may derail his repeated promises to rapidly bring down prices for millions of Americans.

But Trump has defended his strategy, claiming they could raise “trillions” of dollars for the US economy – and that even the mere threat of import duties can prompt countries to bend to his will. “Tariffs are very powerful, both economically and in getting everything else you want,” he said last week.

Reuters contributed to this story