As was expected, the White House today implemented 25% tariffs on steel and aluminum products imported into the United States. This move is the latest in the ongoing series of tariff actions taken by the U.S. since President Trump began his second term.
Last month, the White House said that these tariffs are being implemented to protect the nation’s critical steel and aluminum sectors, which it said “have been harmed by unfair trade practices and global excess capacity.”
These tariffs were initially implemented in March 2018, during President Trump’s first term in office under Section 232 of the Trade Expansion Act of 1962, due to security concerns, in the form of a 25% tariff on steel imports and a 25% tariff on aluminum imports. The White House said that when these tariffs were rolled out in 2018, various countries, including Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom, received exemptions, that it said prevented the effectiveness of the tariffs.
“By granting exemptions to certain countries, the United States inadvertently created loopholes that were exploited by China and others with excess steel and aluminum capacity, undermining the purpose of these exemptions,” said the White House.
And it added that these tariffs will restore fairness to steel and aluminum markets and end unfair trade practices and also the global dumping of steel and aluminum, while citing a report from the first Trump administration that stated steel import levels and global excess were weakening the U.S. domestic economy and threatening to impair national security and excess production and capacity, particularly in China, has been a major factor in the decline of domestic aluminum production.
U.S. trade partners are taking countermeasures to its actions in the form of retaliatory tariffs.
As reported by LM’s sister site, Supply Chain 24/7, the European Union is responding to the Trump administration’s 25% tariffs on steel and aluminum imports by announcing new duties on U.S. industrial and agricultural products. The EU’s move, which will affect about $28 billion worth of American goods, will be implemented in two phases: the first on April 1 and the second on April 13.
“We deeply regret this measure. Tariffs are taxes. They are bad for business and even worse for consumers,” said European Commission President Ursula von der Leyen. “Jobs are at stake. Prices will go up. In Europe and in the United States.”
The EU’s response will hit a variety of U.S. products, including motorcycles, bourbon, peanut butter, jeans, poultry, beef, and home appliances. Officials have made it clear that the tariffs are targeted at goods from Republican-led states, just as they were in previous trade disputes under Trump.
Trade Commissioner Maroš Šefčovič, who recently traveled to Washington to prevent the trade war from escalating, said the EU is not responsible for the current tensions. “I argued to avoid the unnecessary burden of measures and countermeasures, but you need a partner for that. You need both hands to clap,” he said.
The U.S. tariffs, which will impact about $28 billion in European exports, are expected to disrupt supply chains and increase prices on both sides of the Atlantic. The European steel industry, which exports about 16% of its steel to the U.S., is bracing for major losses.
Despite the tit-for-tat measures, von der Leyen emphasized that the EU remains open to negotiations. “We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,” she said.
Meanwhile, the British government has chosen not to impose its own retaliatory tariffs, with Business Secretary Jonathan Reynolds stating that the U.K. will continue negotiations with the U.S. instead. However, he left the door open for future actions, saying, “We will keep all options on the table and won’t hesitate to respond in the national interest.”
For its part, Canada, the largest steel supplier to the U.S., is also taking retaliatory measures in response to the U.S. steel and aluminum tariffs.
An AP report stated that Canada will place 25% reciprocal tariffs on steel products and also raise taxes on a host of items: tools, computers and servers, display monitors, sports equipment, and cast-iron products. The report added that Canada’s 25% reciprocal tariffs are being placed on steel products worth $12.6 billion Canadian (US$8.7 billion) and aluminum products worth $3 billion Canadian (US$2 billion) as well as additional imported U.S. goods worth $14.2 billion Canadian ($9.9 billion) for a total of $29.8 billion (US$20.6 billion).
Matt Muenster, Chief Economist for Green Bay, Wisc.-based Breakthrough, an innovator in transportation management, dedicated to creating transparent and fair strategies for the world’s leading shippers, said that the tariffs placed by the White House on automobiles, steel and aluminum, and semiconductors would raise the price of manufacturing Class 8 trucks, adding that steel tariffs would affect the build out of energy infrastructure, like pipelines.
“Tariffs on industries like steel, aluminum, and automotive are expected to drive up costs in an effort to boost U.S. domestic manufacturing,” said Muenster. “However, due to the highly integrated nature of supply chains, building domestic manufacturing capabilities could take several years. In the meantime, U.S. Customs will need to adapt quickly to tariff changes, potentially causing delays at the border. Additionally, reduced imports of Canadian crude oil may lead to shifts in shipping routes and freight patterns as Alberta redirects its exports to global markets. Frequent shifts in tariff policies also create significant uncertainty for businesses, making them hesitant to invest while waiting for clearer direction.”
And Simon Geale, Executive Vice President at Proxima, a Chicago-based strategic team of procurement specialists, observed that the expansion of tariffs on steel and aluminum will put significant pressure on the automotive industry, due to a sharp rise in material costs.
“The termination of existing exemptions from Canada —a major steel exporter to the U.S.—now means these imports will face a 50% duty,” said Geale. “This will directly affect vehicle production, as steel and aluminum are critical materials, driving up the costs of key components and manufacturing processes. This hike is a game-changer and a wake-up call for automotive manufacturers. The Trump administration is aiming to encourage domestic investment and deter manufacturers from setting up in neighboring countries. However, setting up new facilities and supply chains takes time, making this a race against inflation. To navigate rising costs, manufacturers will need to quickly rethink their strategies—prioritizing alternative suppliers, increasing local production, and strengthening relationships with domestic partners.”
In the longer term, Geale said this shift presents an opportunity for companies to reassess their supply chain structures. And he noted that by investing in supply chain technology, manufacturers can improve visibility, streamline operations, and gain real-time insights to help mitigate risks and uncertainties. While the immediate challenge will be rising costs, Geale said the real opportunity lies in building more resilient, agile supply chains that can withstand future disruptions.”
“Automotive companies that take proactive steps to optimize their operations and strengthen their supply chain resilience will be better prepared to manage rising costs and stay competitive in the face of ongoing uncertainty,” noted Geale.
