Us Steel, Aluminum Tariffs Shake Global Trade Partnerships

in Commodity News

17/03/2025

A US 25% tariff on all steel and aluminum imports took effect March 12, triggering counter-tariffs from some of the US’ largest trading partners.

US President Donald Trump originally ordered across-the-board aluminum and steel tariffs Feb. 11, citing national security concerns. The order updates existing tariffs on aluminum and steel by implementing a 25% duty rate on all imports with no exceptions. The EU, Canada, and other countries objected to the new tax on their goods.

“President Trump’s latest tariffs are an attack on Canadian workers, families, and businesses. My government will ensure our response has maximum impact in the US and minimal impact here in Canada while supporting the workers impacted,” said Mark Carney, prime minister-designate of Canada, in a social media post.

“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade.”

The tariffs have become the center of escalating trade tensions between the US’ largest trading partners. Canada said March 12 that it would impose 25% tariffs on $29.8 billion of US goods starting March 13. The EU said it would impose retaliatory tariffs on $28.4 billion of US goods in April.

Australia, Japan, and the UK failed to receive exemptions from the tariffs but vowed to continue to lobby with the White House. The top suppliers of steel and aluminum to the US are Canada, Brazil, Mexico, South Korea, and China, data from S&P Global Market Intelligence showed.

Steel in favor

The US steel industry, which has long complained about high import volumes, has strongly supported the move.

“AISI supports President Trump’s actions implementing tariffs on imported steel and eliminating the steel Section 232 exclusion process that has been exploited as a loophole by foreign producers seeking to avoid tariffs,” Kevin Dempsey, president and CEO of the American Iron and Steel Institute, said in a statement. “AISI applauds the president’s actions to restore the integrity of the tariffs on steel and implement a robust and reinvigorated program to address unfair trade practices.”

In 2018, Trump imposed Section 232 tariffs of 25% on steel imports and 10% on aluminum imports, but ultimately granted concessions to several countries. Previously, Canada, Mexico, and Australia had been exempted from aluminum and steel tariffs. Brazil, South Korea, Japan, and the EU had received quotas allowing them to avoid steel duties so long as imports remained below specified levels.

Aluminum relationship complicated

The US aluminum sector supported tariff actions in principle, but it has strongly opposed the inclusion of duties on Canada due to the highly integrated nature of the North American aluminum supply chain. Many US producers are hoping for the return of exemptions on Canadian aluminum.

“The aluminum industry supports tariff-free access for Canadian aluminum in the tariffs implemented today. We appreciate President Trump’s focus and attention on growing and strengthening the US aluminum industry, and there is a lot to like in today’s action,” Charles Johnson, president and CEO of the Aluminum Association, said in a statement.

“At the same time, the industry’s decades-long trading relationship with Canada is a good deal for America. The aluminum we import from Canada today is equivalent to the energy generated by at least four Hoover Dams. And just one Canadian smelter job supports about 13 US aluminum jobs further downstream,” Johnson added.

The Aluminum Association, which represents US aluminum producers, immediately called for exemptions on Canadian and Mexican aluminum imports after Trump issued his initial Feb. 11 executive order on the tariffs. According to the association, the US industry sources about two-thirds of its primary aluminum from Canada, and about 90% of its scrap imports come from either Canada or Mexico.

Canada fights back

Canada, the US’ largest trading partner and largest source of aluminum and steel, has been particularly shocked by Trump’s actions.

Trump ordered additional 25% tariffs on Canadian aluminum and steel March 11 in response to retaliatory tariffs the province of Ontario placed on electricity exports to the US.

While both sides eventually backed down after US Commerce Secretary Howard Lutnick intervened, the combative back-and-forth between the two nations has been ongoing since Trump’s decision to impose tariffs on all Canadian imports. Those tariffs—separate from Trump’s March 11 announcement—briefly went into effect before Trump decided to suspend and delay them until April 2.

“We have a very unjust attack on the Canadian economy,” Stephen Lecce, Ontario’s minister of energy and electrification, said March 11 at CERAWeek by S&P Global.

“The premier of Ontario and the premiers of Canada have stood up with the federal government to signal that we cannot accept this interruption of the free flow of goods that has been very good for both our economies. It’s billions of dollars, literally $0.5 trillion of trade moving nationally every single year,” he added.

Canada exported $15.2 billion worth of aluminum to the US in 2023, according to the Canadian Ministry of Natural Resources. A 25% tariff rate would levy $3.8 billion on that amount.

Source: Reuters

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