Trump's 25% tariffs on all steel and aluminum imports go into effect
[March 12, 2025] By
JOSH BOAK and PAUL WISEMAN
WASHINGTON (AP) — President Donald Trump officially increased tariffs on
all steel and aluminum imports to 25% on Wednesday, promising that the
taxes would help create U.S. factory jobs at a time when his seesawing
tariff threats are jolting the stock market and raising fears of an
economic slowdown.
Trump removed all exemptions from his 2018 tariffs on the metals, in
addition to increasing the tariffs on aluminum from 10%. His moves,
based off a February directive, are part of a broader effort to disrupt
and transform global commerce. The U.S. president has separate tariffs
on Canada, Mexico and China, with plans to also tax imports from the
European Union, Brazil and South Korea by charging “reciprocal” rates
starting on April 2.
The EU announced its own countermeasures on Wednesday. European
Commission President Ursula von der Leyen said that as the United States
was “applying tariffs worth 28 billion dollars, we are responding with
countermeasures worth 26 billion euros,” or about $28 billion. Those
measures, which cover not just steel and aluminum products, but also
textiles, home appliances and agricultural goods, are due to take effect
on April 1.
Trump told CEOs in the Business Roundtable on Tuesday that the tariffs
were causing companies to invest in U.S. factories. The 8% drop in the
S&P 500 stock index over the past month on fears of deteriorating growth
appears unlikely to dissuade him, as Trump argued that higher tariff
rates would be more effective at bringing back factories.
“The higher it goes, the more likely it is they’re going to build,”
Trump told the group. “The biggest win is if they move into our country
and produce jobs. That’s a bigger win than the tariffs themselves, but
the tariffs are going to be throwing off a lot of money to this
country.”
Trump on Tuesday threatened to put tariffs of 50% on steel and aluminum
from Canada, but he chose to stay with the 25% rate after the province
of Ontario suspended plans to put a surcharge on electricity sold to
Michigan, Minnesota and New York.
In many ways, the president is addressing what he perceives as
unfinished business from his first term. Trump meaningfully increased
tariffs, but the revenues collected by the federal government were too
small to significantly increase overall inflationary pressures.
Trump's 2018 tariffs on steel and aluminum were eroded by exemptions.
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President Donald Trump walks from the Oval Office to depart on
Marine One on the South Lawn of the White House in Washington, Feb.
28, 2025. (AP Photo/Ben Curtis, File)
 After Canada and Mexico agreed to
his demand for a revamped North American trade deal in 2020, they
avoided the import taxes on the metals. Other U.S. trading partners
had import quotas supplant the tariffs. And the first Trump
administration also allowed U.S. companies to request exemptions
from the tariffs if, for instance, they couldn’t find the steel they
needed from domestic producers.
While Trump's tariffs could help steel and aluminum plants in the
United States, they could raise prices for the manufacturers that
use the metals as raw materials.
Moreover, economists have found, the gains to the steel and aluminum
industries were more than offset by the cost they imposed on
“downstream’’ manufacturers that use their products.
At these downstream companies, production fell by nearly $3.5
billion because of the tariffs in 2021, a loss that exceeded the
$2.3 billion uptick in production that year by aluminum producers
and steelmakers, the U.S. International Trade Commission found in
2023.
Trump sees the tariffs as leading to more domestic factories, and
the White House has noted that Volvo, Volkswagen and Honda are all
exploring an increase to their U.S. footprint. But the prospect of
higher prices, fewer sales and lower profits might cause some
companies to refrain from investing in new facilities.
“If you’re an executive in the boardroom, are you really going to
tell your board it’s the time to expand that assembly line?” said
John Murphy, senior vice president at the U.S. Chamber of Commerce.
The top steel exporters to the U.S. are Canada, Mexico, Brazil,
South Korea and Japan, with exports from Taiwan and Vietnam growing
at a fast pace, according to the International Trade Administration.
Imports from China, the world's largest steel producer, account for
only a small fraction of what the U.S. buys.
The lion's share of U.S. aluminum imports comes from Canada.
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