Trump to Impose 25% Tariffs on Steel and Aluminium, Escalating Trade Tensions
In a dramatic move that could further strain global trade relations, former US President Donald Trump has announced plans to impose 25% tariffs on all steel and aluminium imports starting Monday. The move, which affects major trading partners including Canada, Mexico, South Korea, and Vietnam, marks a significant escalation in Trump’s trade policy, reminiscent of his first-term approach. Speaking to reporters aboard Air Force One on Sunday, Trump said the new tariffs would apply to “everybody,” overriding past exemptions.
The policy will be followed by reciprocal tariffs to match the import duties imposed by other nations on US goods. Canada’s Ontario Premier Doug Ford was quick to criticise the decision, calling it “shifting goalposts and constant chaos,” warning that the move could destabilise the North American economy. The tariffs come on top of existing duties imposed during Trump’s first term, when he enforced 25% tariffs on steel and 10% on aluminium, before granting duty-free quotas to Canada, Mexico, and Brazil. President Joe Biden later extended these exemptions to Britain, Japan, and the EU, but US steel mill capacity has declined in recent years.
According to government and industry data, the largest sources of US steel imports are Canada, Brazil, Mexico, South Korea, and Vietnam. For aluminium, Canada remains the dominant supplier, accounting for 79% of total imports in 2024, followed by Mexico, which supplies aluminium scrap and alloys. Trump has long complained about trade imbalances, particularly with the European Union, criticising its 10% tariff on American auto imports while the US imposes only 2.5% on European cars. However, US automakers benefit from a 25% tariff on pickup trucks, which remains a key profit driver for General Motors, Ford, and Stellantis’s US operations. According to World Trade Organization (WTO) data, the US maintains a trade-weighted average tariff rate of 2.2%, significantly lower than India (12%), Brazil (6.7%), Vietnam (5.1%), and the EU (2.7%). The new tariffs could disrupt global supply chains and drive up production costs, potentially triggering retaliatory measures from affected nations.
In a surprising statement during his flight to New Orleans for the Super Bowl, Trump also hinted at possible fraud in US treasury debt payments, suggesting that the country “may carry less debt than thought.” The US currently holds $36.2 trillion in public debt, a critical factor in global financial stability. Trump has reportedly enlisted billionaire Elon Musk and his government efficiency team to investigate fraud and wasteful spending in federal agencies. The audits have already disrupted several government departments, raising questions about potential actions on US treasury management. The US trade landscape is set for major shifts, with Trump’s reciprocal tariff plan expected to be unveiled by mid-week. With retaliatory measures likely from trading partners, the coming weeks could see intensified global trade disputes and uncertainty in steel and aluminium markets. The White House is expected to release more details on tariff implementations and affected industries in the coming days.
