Trump Announces 25% Tariffs on Steel and Aluminum, More Duties to Follow
President Donald Trump announced that he will impose 25% tariffs on all steel and aluminum imports, including from key trading partners Canada and Mexico. In addition, he mentioned that further import duties would be revealed later in the week, marking a significant move in his administration’s trade policy.
“Any steel coming into the United States is going to have a 25% tariff,” Trump informed reporters on Air Force One while traveling from Florida to New Orleans for the Super Bowl. On being queried about aluminum, he assured that “aluminum, too” would face similar trade penalties.
The announcement invigorated shares of U.S. steel companies significantly. For instance, Cleveland-Cliffs, which has intentions to acquire Pittsburgh’s U.S. Steel, saw its shares jump by 8%. Meanwhile, U.S. Steel saw a rise of 5%, Nucor increased almost 8%, and Steel Dynamics went up by more than 6% before the markets opened on Monday.
Trump also confirmed plans to introduce “reciprocal tariffs” by Tuesday or Wednesday. These tariffs would aim to impose import duties on products from countries that have charged duties on U.S goods. “If they are charging us 130% and we’re charging them nothing, it’s not going to stay that way,” Trump clarified to reporters.
These announcements underscore President Trump’s approach to using tariffs as leverage, a tactic he employs to procure concessions on various issues, such as immigration and revenue generation aimed at reducing the federal budget deficit.
Financial markets reacted to Trump’s statements, with stocks dipping on Friday following his first mention of reciprocal tariffs. On top of this, a decline in consumer sentiment was observed, attributed primarily to concerns about tariffs escalating. The survey highlighted expectations among Americans of rising inflation in the coming months as a consequence of these duties.
Although additional details about the tariffs on steel, aluminum, and reciprocal tariffs weren’t divulged by Trump, he had previously suggested 25% import taxes on all goods from Canada and Mexico, only to delay them for 30 days just a week prior. Meanwhile, he incremented duties on Chinese imports by 10%.
Furthermore, he announced last Friday a postponement on tariffs for small packages, frequently originating from fast-fashion companies like Temu and Shein, until customs officials could develop methods to administer them. Such packages had not been previously subject to tariffs.
Trump’s announcements have sparked immediate concern among global trading partners.
For example, South Korea’s acting president, Choi Sang-mok, convened a meeting with leading foreign policy and trade officials to assess the potential repercussions of Trump’s proposed steel and aluminum tariffs on their industrial sector. South Korea is among the key exporters of steel to the United States, shipping approximately $4.8 billion worth of steel products from January to November of the previous year, accounting for 14% of its global steel exports.
The discussions among South Korean officials centered on examining the potential impacts and evaluating possible responses, although specific details of the meeting remain undisclosed. In response to the news, stocks of major South Korean steelmakers like POSCO and Hyundai Steel experienced declines as the market opened on Monday.
As the international community watches closely, the coming days will likely reveal the broader implications of Trump’s tariff policy and the potential ripple effects across global trade dynamics.
