American tariffs on steel and aluminum imports doubled on Wednesday, while President Donald Trump continued to increase the taxes on foreign metals that, he says, will help revitalize American aluminum steps and smelters.
The White House described the increase in tariffs, which rose from 25% to 50% just after midnight, east time, as a way of addressing “commercial practices that undermine national security.” They were announced during Trump’s visit to a US Steel factory last week, and seem destined to win the favor of workers and the steel industry, including those of uncertain electoral trend states such as Pennsylvania, where Us Steel is based.
The increase in taxes has already irritated nearby allies selling metal to the United States, such as Canada and Europe. They have also sounded alarms between car manufacturers and airplanes, housing builders, oil drilling companies and other industries that depend on the purchase of metals.
In an executive order, Trump said that the increase in tariffs “will more effectively counteract foreign countries that get rid of steel and aluminum surpluses at low price in the US market, undermining the competitiveness of the US industries of steel and aluminum.”
Kevin Dempsey, president of the American Iron and Steel Institute, an industrial group, praised the measure. He said that China and other countries saturated the international market, which made it difficult to compete with US producers.
“Given these difficult international conditions, which do not show signs of improvement, this tariff measure will help avoid new imports of imports that would harm American steel producers and their workers,” said Dempsey.
However, companies that use steel and aluminum to manufacture their products criticized tariffs, stating that they would add costs to US consumers.
Robert Budway, president of the Institute of cans manufacturers, said that duplicating the steel tariff would further increase the cost of canned products in the supermarket.
“This cost falls on millions of American families that depend on canned foods, collected and packaged by farmers and manufacturers of US cans,” he said.
The increase of Wednesday is the last in a growing series of import taxes that Trump has announced since he returned to the oval office in January, including the 25% tariff on steel and aluminum in March. Together, the president’s commercial tactics have increased fear of a world recession and exacerbated the concern of US companies for the cost of doing business.
Economists have pointed out that tariffs on factories inputs, such as metals, run the risk of slowing American manufacturing, since prices increase for factories. By increasing the cost of manufacturing cars, extracting oil and building data centers, the increase in steel tariffs could slow other targets of the Trump government.
An economic analysis published by the United States International Trade Commission, an independent government agency and bipartisan, suggested that, although tariffs on steel and aluminum imposed in Trump’s first mandate helped US producers of steel and aluminum, harmed the economy in general by raising the prices of many other industries, including motorists.
American unions and large companies such as Cleveland-Cliffs and Us Steel, who have important networks of lobbying groups, have argued that tariffs are necessary to maintain their activity. After passing economic trouble for years, Us Steel agreed at the end of 2023 to be acquired by Nippon Steel of Japan, although Trump will make the final decision on whether the merger can be carried out or not.
Foreign governments have been upset about the idea that their steel exports are a threat to the national security of the United States, partly because the US demand of these metals exceeds the current capacity of the country to produce them.
Canada is the largest foreign steel and aluminum supplier in the United States. Mexico, Brazil, South Korea and Germany are also important steel suppliers, while United Arab Emirates, China and South Korea supply small amounts of aluminum.
(The graph shows the origin of steel imports (purple) and aluminum (blue) to the United States in 2024)
On Wednesday, the president of Mexico, Claudia Sheinbaum, said that the increase in tariffs was an unfair and legal basis. He also warned that his country could react with his own measures next week.
“We do not agree, we do not believe it is fair or sustainable because it makes everything more expensive,” he said, he added that the Mexican authorities will meet with their American counterparts to negotiate an agreement. “If it is not achieved, we will also be announcing some measures that we have to take to protect and strengthen jobs. It is not a matter of revenge.”
Historically, Mexico’s steel trade with the United States has been deficient, which means that Mexico imports more steel than it exports.
On Tuesday, Marcelo Ebrard, Secretary of Economy of Mexico, said that the country would demand being exempt from the most recent tariffs. The United Kingdom was granted an exemption from the encumbrances on steel and aluminum as part of a preliminary agreement that both nations reached last month, and it remains to be seen if other countries receive similar treatment as part of the commercial agreements.
Canada, which is both the largest steel exporter to the United States and the largest American steel importer, responded to the initial Trump 25% tariff with a retaliation tariff. However, to allow manufacturers to adapt and find new supply sources, he suspended the start of tariffs until October.
Some Canadian steel manufacturers have said that they believe that foreign producers are now selling in Canada Acero that previously allocated to the US market at unjustly low prices.
Canadian Prime Minister Mark Carney said on Wednesday that his country would not respond immediately to tariffs. “Right now we are having intense conversations with Americans about the commercial relationship,” he said. “Those conversations are progressing.”
Unifor, the largest union in the private sector in Canada, was one of the groups that requested immediate reprisals on Wednesday. They were joined by Doug Ford, Prime Minister of Ontario, the province where the three greatest steel manufacturers are located.
“We cannot cross our arms and let President Trump press us,” Ford told the press in Toronto. “Every day passing generates uncertainty in the sectors, add additional costs to steel. So we have to react immediately.”
Catherine Cobden, president of the Canadian Association of Steel Producers, a commercial group, said that duplicating the tariff on imported steel “closes the US market to our national industry.”
The previous 25% tariff on steel already affected Canadian producers. The steel association calculates that, since the entry into force of the tariff in March, the shipments of steel to the United States from Canada have fallen by 30%
“Steel tariffs at this level will create massive disruptions and negative consequences in our highly integrated steel supply chains and for clients on both sides of the border,” Cobden said.
The Canadian Aluminum Association said in a statement on Tuesday that the expansion of the tariff “makes Canadian exports to the United States economically unfeasible” and that “the industry can be forced to diversify trade towards the European Union.”
Electricity represents about 40% of the aluminum’s foundry cost, and the commercial group estimated that replacing Canadian aluminum with US production would require an extension of the generation of American energy equivalent to four HOOver dams.
“The Canadian industry supports the American objective to increase the national aluminum production capacity from 50 to 80%,” said the group. “Punitive tariffs do not create the certainty necessary for long -term investments with high capital consumption. Even with greater national production, the United States will continue to depend on considerable aluminum imports.”
Sector analysts have said that, until now, US tariffs have not significantly stopped shipments from Canadian aluminum factories. The American aluminum industry is too small to significantly replace Canada imports without expansion and investment.
Century Aluminum, American aluminum manufacturer, announced last year that it would build the first new aluminum cast iron in the United States in half a century, which would double national production. However, the United States would continue to depend on imports for most of its aluminum.