President Donald Trump raised tariffs on all U.S. steel and aluminum imports to 25% on Monday, even as major U.S. suppliers are still reeling from recent tariff threats.
The president issued two proclamations Monday evening amending the tariffs introduced during his first term on steel and aluminum to protect U.S. national security. A proclamation on steel ends several exemptions to the previous 25% duty and tariff-rate quotas that had been negotiated during the previous Trump and Biden presidencies. A second brings the tariffs on aluminum up to 25% from the 10% rate imposed during Trump’s first term.
Both measures will go into force from March 12.
In the proclamations, the White House argued the move is necessary because increasing global exports from China – and South America in the case of aluminum – are weighing on domestic prices.
China has been largely shut out the U.S. steel market after Trump imposed tariffs in 2018. But Beijing’s increased global exports, the proclamation charges, have displaced production in other countries, forcing countries “to export greater volumes of steel articles and derivative steel articles to the United States.”
The actions disproportionately fall on U.S. allies and regional trading partners, however. Canada and Mexico were the two largest suppliers of U.S. steel in 2023, according to the American Iron and Steel Institute. Canada is also the largest U.S. aluminum provider, accounting for twice the next nine aluminum sources combined.
“It just is another slap in the face for Canada,” Angie Setzer, a partner at Consus Ag Consulting told Agri-Pulse on Monday.
During Trump’s first term, the tariffs on steel and aluminum prompted retaliation from trade partners and many U.S. ag exports ended up in the line of fire. The European Union’s retaliatory tariff package included new duties on bourbon, which caused U.S. whisky exports to fall 20%, according to the Distilled Spirits Council of the United States.
Those EU tariffs were only paused when President Joe Biden agreed to replace the tariffs with an import quota in exchange for the EU suspending its retaliatory tariffs on U.S. goods. Those tariffs are due to resume at the end of March unless the two sides negotiate a lasting solution.
Chris Swonger, president and CEO of DISCUS, told Agri-Pulse that he recently travelled to Brussels to appeal to EU officials not to reimpose their retaliatory tariffs.
In a statement published Sunday, Swonger urged the two sides to “move swiftly to find a resolution.” He warned that the “great American Whiskey industry is at stake” and that the reimposition of retaliatory tariffs would have “catastrophic” outcomes for U.S. distilleries.
Officials from EU member states are making clear that the bloc intends to retaliate against the latest steel and aluminum duties. France’s Foreign Minister Jean-Noël Barrot said the EU would have “no hesitation when it comes to defending our interests,” and suggested it would move to impose retaliatory duties this time, as it did in 2018.
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In an interview with CNN, French President Emmanuel Macron also questioned Trump’s approach of applying sweeping tariffs to counter Chinese exports.
“Is the European Union your first problem?” Macron asked. “No, I don’t think so. Your first problem is China, so you should focus on the first problem.”
Canada and Mexico also retaliated to Trump’s steel and aluminum tariffs in 2018 by targeting U.S. food and ag exports, including apples, cheese and pork. The two countries secured exemptions in 2019, however, after agreeing to establish an import monitoring system to detect import surges.
Trudeau’s government has already announced phased in retaliatory tariffs on U.S. goods if Trump implements an executive order signed earlier this month that would introduce an across-the-board tariff on Canadian exports. Among the U.S. ag sectors targeted are the fresh produce, dairy, meat and seed oil industries.
Canada’s Minister of Innovation, Science and Industry François-Philippe Champagne vowed in a statement on Monday that his government’s response to the latest steel and aluminum tariffs would be “clear and calibrated.”
Iowa’s Agriculture Secretary Mike Naig told Agri-Pulse that he sees the merits of Trump’s approach of using tariffs to secure concessions and believes they can be an effective tool when used as a part of a broader trade strategy. He hopes U.S. ag avoids significant economic repercussions, though.
“We would just hope that the impact on agriculture would be limited, or that the time frame that agriculture is affected would be limited,” Naig said. “At this point, we need to watch how this process plays out.”
In comments to reporters in the Oval Office Monday, Trump did suggest that he is considering offering an exemption to one country: Australia. He had spoken with the Australian Prime Minister Anthony Albanese earlier in the day and Trump said he was giving “great consideration” to a request for a carveout.
