Donald Trump to announce new tariffs on steel and aluminium

Former U.S. President Donald Trump stated that he will announce a new 25% tariff on all steel and aluminum imports entering the United States, including those from Australia. This would be a further escalation of existing metal tariffs and part of a significant adjustment to his trade policies. Such a move could have far-reaching implications for global trade relationships and supply chains.

Mr. Trump told reporters aboard Air Force One that he would also announce reciprocal tariffs this week, effective almost immediately. "Any steel coming into our country is going to have a 25% tariff," he said. "And aluminum likewise," he told reporters on Air Force One on Sunday as he flew from Florida to New Orleans to watch the Super Bowl. This announcement signals a potential shift in the U.S.'s approach to international trade, emphasizing protectionist measures.

According to government and American Iron and Steel Institute data, the largest sources of U.S. steel imports are Canada, Brazil, and Mexico, followed by South Korea and Vietnam. In terms of primary aluminum metal supply, hydro-rich Canada is by far the largest supplier to the United States, accounting for 79% of total imports in the first 11 months of 2024. Canadian Innovation Minister François-Philippe Champagne posted on X, stating, "Canadian steel and aluminum support key U.S. industries, including defense, shipbuilding, and automotive." This highlights the interconnectedness of the U.S. and Canadian economies, particularly in these critical sectors.

After Trump initially imposed tariffs, steel mill capacity utilization jumped above 80% in 2019, but has since declined, due to China's global dominance depressing steel prices. A Missouri aluminum smelter revived by the tariffs was idled last year by Magnitude 7 Metals. White House spokesperson Karoline Leavitt said the new tariffs would be in addition to existing steel and aluminum tariffs. The fluctuating fortunes of these industries demonstrate the complex and often unpredictable effects of trade policies.

Trump's remarks came just before German Chancellor Olaf Scholz said the EU was ready to respond "within an hour" if the U.S. imposed tariffs on European goods, underscoring the risk of escalating trade wars. Trump has long complained that the EU imposes a 10% tariff on car imports, far higher than the 2.5% U.S. auto tariff. He has often claimed Europe "doesn't take our cars," but millions of vehicles are shipped west across the Atlantic each year. However, the U.S. imposes a 25% tariff on pickup trucks, a significant source of profit for Detroit automakers GM, Ford, and Stellantis' U.S. operations. This illustrates the ongoing tensions and imbalances in transatlantic trade relations.

Trump announced on Friday that he would impose reciprocal tariffs on many countries, raising U.S. tariff rates to the same level as its trading partners. "If they charge us 130%, and we charge them nothing, that doesn't work," he told reporters on Air Force One. He did not name specific countries but said he would impose tariffs "so that we are treated equally with other countries." This reflects a desire for fairer trade practices and a more level playing field in international commerce.

In a separate Fox News interview, Trump said the actions taken by Canada and Mexico to secure the U.S. border and stop the flow of drugs and migrants were insufficient to avert a March 1 tariff deadline. Trump threatened to impose a 25% tariff on all Mexican and Canadian imports unless the U.S.'s two largest trading partners took stronger action. He suspended the tariffs until March 1 after Mexico pledged to send 10,000 National Guard troops to its borders and Canada deployed new technology and personnel and took new anti-fentanyl measures. Asked whether Mexico and Canada's actions were enough, Trump replied, "No, it's not enough. Something has to happen, it's unsustainable, and I'm changing it." Trump did not specify what actions Canada and Mexico would need to take to avoid the full imposition of tariffs on March 1. The uncertainty surrounding these trade negotiations highlights the potential for significant economic disruption and underscores the importance of ongoing dialogue and cooperation.