Trump’s steel and aluminum tariffs: what’s still hidden

On March 12, 2025, U.S. President Donald Trump imposed a 25% tariff on all steel and aluminum imported into the United States. This move is part of his ambitious agenda to reshape America’s trade relationships with the rest of the world. It is an expansion of the tariff program that Trump implemented during his previous term in office for these two metals.

In 2018, he introduced a 25% tariff on steel and a 10% tariff on aluminum but granted exemptions to certain countries. This time, all of those exemptions have been eliminated, and the tariff on aluminum has been increased from 10% to 25%.

Furthermore, not only are steel and aluminum metals subject to the tariffs, but also products made from these metals, such as car parts and window frames. This means the tariffs could have a far-reaching impact on consumer prices for Americans.

The Importance of the Steel and Aluminum Industries to Trump

During his first presidential campaign nearly a decade ago, Trump focused on the decline of the U.S. steel and aluminum manufacturing industries. Both sectors had experienced decades of decline in both production and employment as China emerged as the world’s manufacturing superpower.

Trump has repeatedly argued that steel and aluminum are critical industries that play a pivotal role in national defense and infrastructure. He once emphasized that “without steel and aluminum, you almost have no country” and that these industries are the foundation of the nation, especially during wartime.

In 2018, during his first term in the White House, Trump imposed tariffs on steel and aluminum with the goal of boosting domestic production of these metals by making imported metals more expensive for American consumers. However, some major suppliers of these metals, including Canada, Mexico, and the European Union, were eventually exempted from the tariff plan. Now, American steel and aluminum companies say they are still struggling to compete with imports.

More broadly, trade tensions in the global steel and aluminum markets have increased over the past year as more Chinese products have flooded markets in other countries. This reality has led many economies, such as India and the EU, to introduce trade measures to restrict imports from China.

Trump believes that through high tariffs on imported steel and aluminum products, a “level playing field” will be created for domestic manufacturers. This is seen as a way to stimulate investment, expand production, and create more jobs.

The Most Affected Economies

According to data from Morgan Stanley, U.S. net imports meet more than 80% of the country’s aluminum needs and 17% of its steel needs.

Canada will likely be the economy most affected by Trump’s steel and aluminum tariffs, as it is the largest supplier of both metals to the U.S.

According to U.S. government data, Canada accounts for 58% of U.S. aluminum imports by volume, followed by the United Arab Emirates at 6% and China at 4%. For steel, Canada accounts for 23% of U.S. imports, followed by Brazil at 16%, Mexico at 12%, and South Korea at 10%.

What Could Happen Next?

What Trump did in his previous term and has done so far in his second term indicates there is an opportunity for negotiation. Some exporting economies eventually secured exemptions from the metal tariffs in Trump’s first term, and some oil and gas companies also received exclusions from these tariffs based on business needs for specific products.

However, this time, Trump has signaled that the steel and aluminum tariffs will not allow for any exemptions. Australia’s last-minute lobbying to exempt its steel and aluminum from the tariffs failed, which could negatively impact the bilateral relationship between the two long-standing allies. Trump even threatened to double the steel and aluminum tariffs on Canada to 50% but withdrew the threat just a few hours later.

Trump has also floated the idea of imposing tariffs on imported copper, but the implementation of copper tariffs could take a little longer than the steel and aluminum tariffs.

To date, he has used presidential authority to regulate steel and aluminum imports for “national security” reasons. He has reinstated and gradually increased the tariff rates over time:

• 2018: 25% tariff on steel and 10% on aluminum.
• 2025: Began with a 25% tariff for both sectors in February–March; later increased to 50% starting June 4, 2025.

According to the White House, these policies have helped reduce steel and aluminum imports, triggered more than $10 billion in investment to build new plants, and increased capacity utilization in previous years. This could be the motivation behind Trump’s decision to pursue the policy to the end.

Will Trump Succeed?

The steel and aluminum tariffs that Trump imposed in his previous term were aimed at making the U.S. a self-sufficient nation for these metals. But in 2024, U.S. steel industry output was less than 1% lower than in 2017—the year before Trump first imposed the steel and aluminum tariffs. Aluminum output actually fell by 10%.

Increased costs, especially for labor and energy, are the main reasons behind the long-term decline of the U.S. steel and aluminum manufacturing industries. Canada plays a crucial role in supplying aluminum to the U.S. because its plants often use cheap hydropower.

In addition, economists warn that Trump’s extensive use of tariffs poses a risk of increased costs for households, such as for food and gasoline. Inflationary pressure could therefore increase, while a key promise Trump made to American voters during his campaign was to bring prices down. Trump administration officials argue that tariffs are part of a larger economic strategy, which includes broad domestic tax cuts and increased energy production—measures that will bring overall prices down.

However, the recent decline in the U.S. stock market shows investor concern that the economy could fall into a recession due to Trump’s policies. Wall Street strategists are becoming less optimistic about the outlook for the U.S. stock market this year because of Trump’s tariffs and signs of a slowing U.S. economy.

According to a report from the Yale University Budget Lab, Trump’s tariffs and the retaliation from trading partners will cost the U.S. 0.4% of its GDP in the long run, “equivalent to a permanent reduction in the size of the U.S. economy by $80-110 billion per year.”

On the other hand, independent organizations point out that high domestic prices have negatively affected manufacturing industries that use steel and aluminum as raw materials, leading to increased costs and even job losses.

According to: Vneconomy and internet sources.