U.S. Doubles Tariff Rates on Imported Steel and Aluminum
(Reuters) – On Wednesday, the U.S. announced that tariff rates on most imported steel and aluminum have doubled. President Donald Trump is hoping that trading partners will respond with their best offers to stave off an escalation of international trade tensions and hefty import taxes on other goods set to kick in early July.
Trump signed an enforcement declaration late Tuesday, reinforcing the unexpected announcement made the previous week regarding tariffs on steel and aluminum imports. Following a reduction of tariffs from 50% to 25%, the rates have now returned to 50% as of Wednesday.
“We started at 25%, and after analyzing the data, we recognized it was beneficial, but we needed to increase it,” White House economic adviser Kevin Hassett explained at a steel industry conference in Washington on Tuesday. The new rates will take effect at 12:01 AM (0401 GMT).
This increase applies to all trading partners, except for the UK. The UK is the only country that has secured a trade deal with the U.S. during a 90-day pause from broader Trump tariffs. Steel and aluminum imports from the UK, not a leading exporter of metals to the U.S., will remain at 25% until at least July 9.
About a quarter of all steel utilized in the U.S. is imported, and according to Census Bureau data, these new taxes could affect Canada and Mexico, which rank first and third in terms of steel shipments to the U.S.
Canada faces a higher exposure due to aluminum tariffs, being the leading exporter to the U.S., which sources about half of its aluminum from international markets.
The office of Prime Minister Mark Kearney stated that Canada is “engaged in intensive negotiations to eliminate these and other tariffs.”
Mexican Economy Minister Marcelo Ebrard has also criticized the tariffs, calling them unsustainable and unjust, especially since Mexico imports more steel than it exports.
“It’s illogical for the U.S. to impose tariffs on products where there’s excess supply,” he remarked, noting that Mexico would pursue a tariff exemption on Friday.
An unexpected increase in tariffs has rattled the metal markets, particularly aluminum. With limited domestic production capacity, import volumes might not change unless prices rise significantly.
Upcoming Trade Negotiations
Wednesday marks a deadline set by the White House for trading partners to present their offers, aiming to avoid Trump’s impending tariff increases in five weeks.
Since Trump’s announcement about a suspension on tariffs on April 9, consultations with various countries have been underway, but only the UK trade agreement has been formalized so far. Even that deal only lays the groundwork for further discussions.
With a few weeks remaining, the Trump administration is eager to finalize more agreements. Reports indicate that U.S. trade representatives are requesting countries to submit their best proposals in key areas, including tariff improvements and non-tariff barriers affecting U.S. industries and agricultural products.
The administration hopes to respond “within a few days” with a “landing zone,” which could lead to changes in tariff rates by July 8. Many trading partners are facing significant pressure, navigating the complexities of current rates for their exports to the U.S.
White House spokeswoman Karoline Leavitt confirmed this information, stating, “USTR has sent this letter to all trading partners as a friendly reminder that the deadline has come.”
The Trump administration is also seeking commitments related to digital trade and economic security, along with specific pledges from individual countries.
