Trump to impose 25 Percent tariffs on steel and aluminum in trade escalation

Trump to impose 25 Percent tariffs on steel and aluminum in trade escalation/Reuters

VoM News Desk | February 10, 2025 | 12:41 PM IST | Breaking News, World | Follow on Google News

Trump to impose 25 Percent tariffs on steel and aluminum in trade escalation

ABOARD AIR FORCE ONE, Feb 9 (Reuters) – U.S. President Donald Trump said on Sunday he will introduce new 25% tariffs on all steel and aluminum imports into the U.S., on top of existing metals duties, in another major escalation of his trade policy overhaul.

Trump, speaking to reporters on Air Force One on his way to the NFL Super Bowl in New Orleans, said he will announce the new metals tariffs on Monday.

He also said he will announce reciprocal tariffs on Tuesday or Wednesday, to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each country.

“And very simply, it’s, if they charge us, we charge them,” Trump said of the reciprocal tariff plan.

The largest sources of U.S. steel imports are Canada, Brazil and Mexico, followed by South Korea and Vietnam, according to government and American Iron and Steel Institute data.

By a large margin, hydropower-rich Canada is the largest supplier of primary aluminum metal to the U.S., accounting for 79% of total imports in the first 11 months of 2024.

“Canadian steel and aluminum support key industries in the U.S. from defence, shipbuilding and auto,” Canadian Innovation Minister Francois-Philippe Champagne posted on X.

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“We will continue to stand up for Canada, our workers, and our industries.”

Trump also said that while the U.S. government would allow Japan’s Nippon Steel (5401.T), opens new tab to invest in U.S. Steel (X.N), opens new tab, it would not allow this to become a majority stake.

“Tariffs are going to make it very successful again, and I think it has good management,” Trump said of U.S. Steel.

Nippon Steel declined to comment on the latest announcements from Trump.

QUOTA QUESTIONS

Trump during his first term imposed tariffs of 25% on steel and 10% on aluminum, but later granted several trading partners duty-free exemptions, including Canada, Mexico and Brazil. Mexico is a major supplier of aluminum scrap and aluminum alloy.

Former President Joe Biden later negotiated duty-free quota arrangements with Britain, the European Union and Japan. It was not immediately clear from Trump’s announcement what will happen to those exemptions and quota arrangements.

“Quebec exports 2.9 million tons of aluminum to (the U.S.), that is, 60% of their needs. Do they prefer to get supplies from China?” Francois Legault, premier of Quebec, said on X.

“All this shows that we must begin to renegotiate our free trade agreement with the United States as soon as possible and not wait for the review planned for 2026. We must put an end to this uncertainty.”

Steel mill capacity usage jumped to levels above 80% in 2019 after Trump’s initial tariffs, but has fallen since then as China’s global dominance of the sector has pushed down steel prices. A Missouri aluminum smelter revived by the tariffs was idled last year by Magnitude 7 Metals.

Kevin Dempsey, president and CEO of the American Iron and Steel Institute (AISI), said the industry trade group welcomed Trump’s commitment to a strong American steel industry.

“We look forward to working closely with the President and his administration to implement a robust and reinvigorated trade agenda to address the many foreign market-distorting policies and practices that create an unlevel playing field for American steelmakers.”

MATCHING RATES

Trump said he would hold a news conference on Tuesday or Wednesday to provide detailed information on the reciprocal tariff plan, adding that he first revealed on Friday that he was planning reciprocal tariffs to ensure “that we’re treated evenly with other countries.”

The new U.S. president has long complained about the EU’s 10% tariffs on auto imports being much higher than the U.S. car rate of 2.5%. He frequently states that Europe “won’t take our cars” but ships millions west across the Atlantic every year.

The U.S., however, enjoys a 25% tariff on pickup trucks, a vital source of profit for Detroit automakers General Motors (GM.N), opens new tab, Ford (F.N), opens new tab and Stellantis’ (STLAM.MI), opens new tab U.S. operations.

The U.S. trade-weighted average tariff rate is about 2.2%, according to World Trade Organization data, compared to 12% for India, 6.7% for Brazil, 5.1% for Vietnam and 2.7% for European Union countries.

Chris Swonger, CEO of the Distilled Spirits Council of the United States, expressed concern that Trump’s new steel tariffs would lead to the EU reimposing retaliatory duties on American whiskey and raising them to 50%.

“We are urging that the U.S. and EU move swiftly to find a resolution. Our great American whiskey industry is at stake. A 50% tariff on America’s native spirit will have a catastrophic outcome for the 3,000 small distilleries across the United States.”

BORDER STEPS

In a separate Fox News interview, Trump said Canada’s and Mexico’s actions to secure their U.S. borders and halt the flow of drugs and migrants are insufficient ahead of a March 1 tariff deadline.

Trump has threatened to impose tariffs of 25% on all Mexican and Canadian imports unless America’s two largest trading partners take stronger actions.

He paused the tariffs until March 1 after some initial border security concessions from the two countries, with Mexico pledging to add 10,000 National Guard troops to its border and Canada deploying new technology and personnel and taking new anti-fentanyl steps.

Asked whether Mexico’s and Canada’s actions were good enough, Trump replied: “No, it’s not good enough,” Trump said. “Something has to happen, it’s not sustainable, and I’m changing it.”

Trump did not say what Canada and Mexico needed to do to avoid broad tariffs on March 1.

(Except for the headline, this story has not been edited by VoM News staff and is published from the syndicated feed)

VoM News Desk

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