Trump doubles US tariffs on steel and aluminium to 50%, sparking global concern over trade tensions, rising costs, and impact on businesses and allies.
New Tariff Hike Stuns Businesses and Allies
On Wednesday, US President Donald Trump enacted a new executive order doubling tariffs on imported steel and aluminium from 25% to 50%. The steep hike marks a dramatic escalation in his efforts to bolster domestic metal industries and reduce foreign dependence. However, the move has provoked concern among international trade partners and American manufacturers who rely on imported materials.
Timing and Targets of the Tariff Increase
The tariff order took effect immediately after its signing. It applies broadly to steel and aluminium imports, sparing only the UK, which received a 25% duty exemption amid ongoing trade negotiations. Affected countries include major US suppliers such as Canada, Mexico, Brazil, South Korea, and EU nations. Trump’s administration cited national security and economic sovereignty as core justifications.
Rationale: Protecting American Industry
Trump defended the policy at a rally at a US Steel factory, framing the increase as vital to preventing foreign “theft” of American industry. He said the higher rate would make it nearly impossible for international suppliers to undercut US manufacturers. “At 50%, they can no longer get over the fence,” he declared. The measure also reverses exemptions granted during his first term, which he claimed diluted the protective impact.
Industry and Global Reaction
The announcement shocked manufacturers and importers who had hoped the threat was temporary. Business leaders warned of serious disruptions. Rick Huether, CEO of Independent Can Co., said the uncertainty had already led him to delay investments and raise prices, fearing customers might abandon metal packaging. Economists echoed his concern, pointing to a 2020 study showing previous tariffs created only 1,000 steel jobs but cost 75,000 in related industries.
International Diplomatic Fallout
The European Union and Canada have indicated they may retaliate with their own tariffs. EU trade spokesperson Olof Gill confirmed that intense negotiations are underway to prevent escalation. In the UK, where steel represents 7% of exports to the US, officials were relieved by their exemption but warned of wider economic risks. Gareth Stace, head of UK Steel, said 50% tariffs would be “catastrophic,” effectively shuttering market access.
Impact on US Businesses and Supply Chains
The American Iron and Steel Institute reported a 17% drop in steel imports in April, with expectations of a sharper decline following the new policy. Manufacturers like Drill Rod & Tool Steels, which imports specialized Austrian steel, now face nearly double their expected tariff bills. Chad Bartusek, the company’s supply chain director, estimated an increase from $72,000 to $145,000 in duties, straining operations.
Economic and Political Stakes Ahead
Economists have broadly criticised the strategy, particularly the decision to double tariffs on intermediate goods. Erica York of the Tax Foundation called the move “very foolish,” predicting deeper job losses across US manufacturing. As the Biden administration begins its term, the tariff’s long-term viability and global implications remain hotly contested.
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