President Donald Trump disclosed aboard Air Force One that he intends to declare a 25% tariff on all steel and aluminum imports entering the United States. This announcement is scheduled to take place on Monday, marking a significant move in trade policy amid evolving global economic dynamics.
Speaking on the flight, Trump stated, “We’ll also be announcing steel tariffs on Monday,” clarifying that any steel coming into the country will incur a 25% tariff. He further added, “Aluminum, too,” indicating the comprehensive nature of this measure.
In addition, Trump revealed plans to hold a subsequent news briefing on Tuesday or Wednesday to introduce substantial new reciprocal tariffs. These tariffs could potentially match other nations’ tariffs on U.S. products dollar-for-dollar. “Very simply, it’s if they charge us, we charge them,” Trump explained. However, specifics regarding the scope of these new tariffs or the timeline for their implementation remain vague. It remains uncertain if the new steel and aluminum tariffs will be additional to those previously imposed on exports from nations like China.
During his earlier term in 2018, Trump announced a similar 25% tariff on steel and a 10% tariff on aluminum, though these were lifted from Mexico and Canada in the following year. More recently, a 10% tariff was imposed on all Chinese goods entering the U.S., leading to immediate retaliatory measures from China. In response, China imposed tariffs on certain chips and metals and initiated investigations into prominent brands such as Google and the manufacturers of Calvin Klein and Tommy Hilfiger.
Following these developments, Trump began to ease tariffs, temporarily halting taxes on goods valued at $800 or less imported into the U.S. until the Commerce Department devises a system to address these challenging-to-monitor items. He also deferred 25% tariffs on Mexican and Canadian goods until at least March 1.
While the U.S. economy is no longer primarily manufacturing-based, it continues to consume significant quantities of steel and aluminum annually. These metals are crucial to sectors like automotive manufacturing, aerospace, oil production, and infrastructure development, including roads and bridges. Tariffs are expected to elevate production costs in these industries due to increased prices on imported metals and potential price hikes by domestic producers due to decreased competition from cheaper imports.
Notably, Canada and Mexico are the leading suppliers of steel to the U.S., with Canada representing nearly a quarter of steel imports by weight and Mexico about 12%, as per data from the American Iron and Steel Institute. Steel imports by American companies fell by 27% between 2017 and 2019, though a portion of this reduction is attributed to lower steel consumption. Domestic production of steel rose during this period but covered only two-thirds of the decline in imports. Despite support from tariffs, domestic steel production was still 2% down from 2023 and nearly 10% lower than a decade ago.
The planned tariffs by President Trump could have far-reaching impacts on the U.S. economy and its trading partners, notably Canada and Mexico. As industries brace for potential cost increases, the full effects of these tariffs will unfold in the coming months, providing a clearer picture of their economic implications.
