ABOARD AIR FORCE ONE, Feb. 9 – President Donald Trump has announced his decision to impose additional 25% tariffs on all steel and aluminum imports entering the United States. This move, which builds upon prior metal duties, marks another significant shift in his administration’s approach to trade policies.
Speaking to reporters aboard Air Force One en route to the Super Bowl in New Orleans, Trump confirmed that the official announcement would be made on Monday. Additionally, he stated that new reciprocal tariffs would be introduced on either Tuesday or Wednesday, taking effect almost immediately. These tariffs will apply to all trading partners, ensuring that the U.S. matches the tariff rates imposed by other nations.
“If another country imposes tariffs on us, we will do the same to them,” Trump said, justifying the policy change.
Impact on Steel and Aluminum Imports
The United States sources a considerable portion of its steel imports from Canada, Brazil, and Mexico, with South Korea and Vietnam also playing significant roles in the supply chain. Hydropower-rich Canada, in particular, serves as the largest supplier of primary aluminum to the U.S., providing nearly 79% of total imports during the first 11 months of 2024.
Canadian officials responded swiftly to the announcement, highlighting the crucial role their steel and aluminum industries play in supporting key U.S. sectors such as defense, shipbuilding, and the automotive industry. Canada’s Innovation Minister, François-Philippe Champagne, reaffirmed the government’s commitment to defending its national interests and standing up for Canadian workers.
Concerns Over Foreign Investment and Trade Agreements
Trump also addressed concerns over foreign investment in U.S. industries, specifically regarding Japan’s Nippon Steel and its interest in acquiring a stake in U.S. Steel. While the U.S. government would permit the investment, Trump made it clear that Japan’s steel giant would not be allowed to take majority control of the company.
“Tariffs are going to make it very successful again, and I think it has good management,” Trump remarked regarding the state of U.S. Steel.
Japan’s Nippon Steel declined to comment on the potential impact of these new trade measures.
Trade Quotas and Exemptions in Question
During his previous administration, Trump had already introduced a 25% tariff on steel and a 10% tariff on aluminum. However, several trading partners, including Canada, Mexico, and Brazil, were later granted duty-free exemptions. In contrast, the Biden administration later negotiated quota-based agreements with Britain, the European Union, and Japan, allowing duty-free imports up to a certain threshold.
With Trump’s latest announcement, it remains uncertain whether these existing exemptions and quotas will remain intact. The new tariff measures could force trading partners to renegotiate their agreements.
Quebec Premier François Legault raised concerns about the economic impact of the tariffs, emphasizing that the province exports 2.9 million tons of aluminum to the U.S. annually—making up 60% of U.S. aluminum needs.
“Do they prefer to get supplies from China?” Legault questioned, implying that increased tariffs could push American industries toward alternative sources. He also called for an early renegotiation of trade agreements rather than waiting until 2026, arguing that uncertainty in trade policies could harm businesses and industries on both sides of the border.
Steel Industry’s Response
Trump’s initial tariffs in his first term led to a surge in domestic steel mill capacity utilization, reaching levels above 80% in 2019. However, the industry has since faced setbacks, with China’s dominance in global steel production pushing prices downward. Some U.S. steel and aluminum manufacturers, such as Missouri-based Magnitude 7 Metals, have struggled to maintain operations, with the company shutting down an aluminum smelter last year.
Despite these challenges, the American Iron and Steel Institute (AISI) welcomed Trump’s commitment to revitalizing the domestic steel industry. Kevin Dempsey, AISI’s president and CEO, expressed support for the move, stating that it would help counter foreign market-distorting practices that have put American manufacturers at a disadvantage.
Reciprocal Tariffs and the Auto Industry
Trump also plans to introduce reciprocal tariffs that would match duties imposed by other countries on American goods. He expressed dissatisfaction with the European Union’s current 10% tariff on U.S. auto imports, pointing out that the U.S. only levies a 2.5% tariff on European cars.
“The U.S. allows millions of European cars in, but they won’t take ours,” Trump complained, underscoring the imbalance in trade.
However, the U.S. maintains a 25% tariff on imported pickup trucks, which significantly benefits domestic automakers like General Motors, Ford, and Stellantis’ U.S. operations. The typical tariff rate based on trade weight in the U.S. stands at around 2.2%, whereas other countries, such as India (12%), Brazil (6.7%), and Vietnam (5.1%), maintain higher rates.
Potential Retaliation from the EU
Not everyone is pleased with Trump’s new tariffs. Chris Swonger, CEO of the Distilled Spirits Council of the United States, raised concerns about the European Union reintroducing retaliatory tariffs on American whiskey. The EU had previously imposed tariffs on U.S. whiskey in response to past trade disputes.
Swonger warned that an escalation in trade tensions could result in the EU increasing duties on American whiskey to 50%, which would devastate the industry.
“A 50% tariff on America’s native spirit will have a catastrophic outcome for the 3,000 small distilleries across the United States,” he cautioned, urging the U.S. and EU to negotiate a resolution quickly.
Border Policies and Potential Tariffs on Canada and Mexico
Beyond the steel and aluminum tariffs, Trump also addressed issues related to border security. He expressed dissatisfaction with the measures taken by Canada and Mexico to curb the flow of drugs and illegal immigration, suggesting that their current efforts were insufficient.
Earlier, Trump had postponed imposing broad tariffs on all Mexican and Canadian imports until March 1, citing initial concessions made by both countries. Mexico pledged to deploy 10,000 National Guard troops to its border, while Canada introduced new security technologies and personnel to combat fentanyl trafficking.
However, Trump made it clear that these actions did not meet his expectations.
“No, it’s not good enough,” Trump said. “Things need to change, this can’t continue, and I’m taking action.”
He did not specify what additional steps Canada and Mexico would need to take to prevent the tariffs from going into effect. With the March 1 deadline looming, both countries may need to negotiate further to avoid broad trade penalties.
Conclusion
Trump’s decision to implement new steel and aluminum tariffs, along with reciprocal trade measures, signals a significant shift in U.S. trade policy. While these measures aim to strengthen domestic manufacturing, they have also raised concerns among trade partners, industries, and economic analysts about potential retaliatory actions and the broader impact on global trade relations.
With further announcements expected in the coming days, businesses and policymakers alike will be closely monitoring how these policies unfold and their long-term consequences for the U.S. and international markets.