US President Donald Trump has significantly raised tariffs on steel and aluminum imports to a flat 25 per cent "without exceptions or exemptions." The move, Trump hopes it would help revitalise struggling domestic industries in the US, also risks escalating multi-front trade war. The tariff hike, signed into law on Monday, raises the US tariff rate on aluminum to 25 per cent from previous 10 per cent rate and removes country-specific exemptions and hundreds of thousands of product-specific exclusions. The tariffs will impact millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the US duty free under the carve-outs. A White House official confirmed the new tariffs will take effect on March 4. However, he later indicated he would consider an exemption for Australia, citing its trade deficit with the U.S. The move will simplify tariffs on the metals "so that everyone can understand exactly what it means," Trump explained to reporters. "It's 25% without exceptions or exemptions. That's all countries, no matter where it comes from, all countries." However, Trump later signalled that he would give "great consideration" to Australia's request for an exemption to the steel tariffs due to that country's trade deficit with the US. Expanding Tariffs to Strengthen US Industry The new tariffs extend beyond raw metals to downstream products made from foreign steel, such as fabricated structural steel, aluminum extrusions, and steel strand for pre-stressed concrete. In addition, Trump announced a new North American standard requiring steel to be "melted and poured" and aluminum to be "smelted and cast" within the region. This is intended to curb the influx of minimally processed Chinese and Russian metals that previously avoided tariffs through third-country transshipment. Peter Navarro, Trump's trade adviser, defended the move, calling it the "steel and aluminum tariffs 2.0" and claiming it would end foreign dumping, boost domestic production, and secure America's economic and national security. Backlash from Global Trading Partners The tariff hike has drawn sharp criticism from US allies and trading partners. * Canada, the largest supplier of primary aluminum to the US, condemned the tariffs as "totally unjustified", arguing that Canadian metals support vital US industries such as defence, shipbuilding, energy, and automotive manufacturing. * The European Commission stated that it "sees no justification" for the move. It said President Ursula von der Leyen would meet U.S. Vice President JD Vance in Paris on Tuesday during an AI summit. * South Korea held emergency meetings with steelmakers to minimise the impact. * India's Prime Minister Narendra Modi is reportedly preparing tariff reductions ahead of a meeting with Trump to boost US exports, after Trump previously accused India of being a "very big abuser" on trade. Trump's top economic adviser Kevin Hassett singled out the country as having "enormously high" tariffs in a CNBC interview. Recent US data revealed a sharp decline in domestic aluminum production, with smelters producing only 670,000 metric tons last year—down from 3.7 million in 2000. Recent plant closures, particularly in Kentucky and Missouri, have left the country heavily dependent on imports. In 2023, steel imports made up approximately 23 per cent of total US steel consumption, according to data from the American Iron and Steel Institute. Canada, Brazil, and Mexico remained the top suppliers. Canada, benefiting from its abundant hydropower resources, supplied nearly 80 per cent of the US's primary aluminum imports in 2024. Trump Signals More Trade Measures Ahead As he signed the proclamations, Trump warned of more tariff actions in the coming days, including reciprocal tariffs on countries that impose duties on US goods. He also hinted at potential tariffs on cars, semiconductors, and pharmaceuticals. When asked about threats of retaliation by other countries against his new tariffs, the US president said: "I don't mind." The Bigger Picture: US Trade Strategy Trump first introduced steel and aluminum tariffs in 2018 under Cold War-era national security laws, granting exemptions to some allies. His successor, Joe Biden, later negotiated duty-free quotas for Britain, Japan, and the European Union. While China exports minimal steel to the US, Washington maintains that China's subsidised overproduction forces other countries to offload excess steel globally, leading to transshipments into the US market. With steel imports making up 23 per cent of US steel consumption in 2023, the new tariffs could reshape trade relationships, potentially sparking retaliatory measures from major suppliers. As the global response unfolds, all eyes remain on Washington's next trade policy moves. Attribution: Reuters
