President Donald Trump once again shook the economic landscape on Monday by ordering a 25% import duty on all steel and aluminium imported into America from any country. The new tariff, which is due to come into effect on 12th March, is a blanket tariff rate covering all countries and is reminiscent of steps Trump first took in 2018 during his first term.
Trump declared this new order to be “the beginning of making America rich again”. Reigniting a strategy reminiscent of his first term, aiming to strengthen domestic industries and reduce America's dependency on foreign countries. But what does this decision mean for the U.S. economy, workers and international relations?
For American steel and aluminium producers, these tariffs are being celebrated as a long-overdue lifeline. U.S. Steel, a leading steelmaking company in the states took to X.com this weekend to thank President Trump for his “interest in a thriving future for U.S. Steel”.
However, the broader economic impact could be more complex. Industries such as automotive, construction and consumer goods which rely on steel and aluminium are bracing for increased costs. In an interview with Bloomberg, Jim Farley, CEO of Ford, said: “I think the longer term is a bigger concern. These kinds of tariffs – if they persist beyond months – we could see billions of dollars of pressure on the industry, lost jobs and lots of impacts to communities in our ecosystem and in the industry.”
Which Countries will feel the Greatest Impact?
As the below chart shows, the U.S. gets most of its imported steel from Canada. Surprisingly China, the world’s largest steel producer, is only the 10th largest market and imported roughly 1.8% of all US imported steel in 2024.
Similarly, the U.S. imported 3.2 million tonnes of Canadian aluminium in 2024. For context, the next highest was 0.3 million tonnes from the United Arab Emirates.
How the Rest of the World has Responded
The BBC is reporting UK government sources as saying that now is the time for “cool heads” and that “retaliatory tariffs may not be in the best interest of the industry”.
In comparison, the EU and Canada have said that they will retaliate against these tariffs if they are to be introduced on 12th March. The European Commission President Ursula von der Leyen stated that “unjustified tariffs on the EU will not go unanswered”.
Furthermore, to show the magnitude of Trump’s announcement, Reuters are reporting that small Indian steelmakers are fearing the indirect impact of Trump’s tariffs. They fear that the increase in tariffs will persuade more Chinese manufacturers to focus on the Indian market to cover any financial short-fall they may feel from the increased American tariff rates.
Conclusions
It is clear that President Trump continues to see tariffs as not only a weapon but also a bargaining chip to be used in negotiations. This latest move is yet another step which has sparked fresh concern globally and brought to the fore larger topics such as protectionism, global trade and the true cost of economic independence.
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