US Steel Traders grapple with ‘nightmare’ tariff doubling
US President Donald Trump said during an appearance at US Steel’s Irvin Works outside Pittsburgh, Pennsylvania, on Friday May 30 that he would double Section 232 tariffs from 25% to 50% on steel and aluminium. The news ruined weekends across the nation.
“It’s a nightmare… It’ll destroy the economy, manufacturing — nothing good about it,” a trader said. “Domestic mills will take advantage of this and raise prices. Everything’s been suspended since Friday… I’ve got cargo coming in [this month] and that’s going to be penalized. [The customer] already said they won’t pay for it.”
A West Coast trader said his market is particularly vulnerable to off-the-cuff tariff announcements due to the local reliance on imported steel — which may not be a negative for the Trump administration.
“Importers are scrambling right now, and customers who bought import are also scrambling to ensure they have steel in the next 30-60 days,” he said, adding that it is “probably icing on the cake for the Trump administration — stick it to the states that did not vote for him.”
“Materials that have rolled and have shipped or are at the docks about to ship will have to be renegotiated. What means in terms of who shoulders the burder of the additional 25% is yet to be determined,” he said. “So that being said, I fully anticipate domestic mills will raise prices. Not sure if we’ll see announcements, as the optics might look bad. If you call today, you’ll find mills saying they don’t have availability, which is a crock. They are just waiting to see what they can get away with.”
A distributor told Fastmarkets that domestic mills have essentially stopped quoting “because mills haven’t figured out what they’re going to do yet.”
“Mills have paused their quoting,” he said. “We’ve been talking to traders, and they’re definitely concerned depending on how these things shake out. They’ve got steel on the water. They may need to absorb the tariffs or get the mill to do some absorption.”
Yet another trader called the situation “truly interesting times.”
“A 50% mark-up is impossible to catch in the market — to do any business on imports with customers,” he said. “Domestic mills haven’t changed their prices yet, but with 50%, it’ll always be difficult. Maybe not impossible, but difficult for buyers to make economic sense of importing.”
US court overrules reciprocal tariffs; Section 232 duties remain in place
In a court ruling issued late Wednesday, May 28, Trump’s reciprocal tariffs, imposed on “Liberation Day” on April 2, and the 25% ad valorem duties imposed on Mexico and Canada and 10% duties on China were overturned.
Trump justified the tariffs under the International Emergency Powers Act of 1977 (IEEPA). But “the court does not read IEEPA to confer such unbounded authority and sets aside the challenged tariffs imposed thereunder,” the ruling said.
“Any interpretation of IEEPA that delegates unlimited tariff authority is unconstitutional,” the court added.
“The court holds for the foregoing reasons that IEEPA does not authorize any of the Worldwide, Retaliatory, or Trafficking Tariff Orders,” the ruling concluded. “The challenged Tariff Orders will be vacated and their operation permanently enjoined.”
The decree “has had a positive impact on global markets and by extension US sentiment,” a US-based source told Fastmarkets.
But the 25% tariffs on steel and aluminum, which went into effect on March 12, remain in place.
Some market participants remain frustrated with the tariffs.
“All we can do is wait and see,” a distributor and former auto buyer told Fastmarkets, who believes that Trump will appeal to the Supreme Court to overturn the ruling and allow reciprocal tariffs to go into effect.
Another source said they “are not feeling anything different” about the tariffs.
The Trump administration has already challenged the court’s overruling. The administration filed a notice of appeal to the Court of Appeals for the Federal Circuit on May 28 following the decision.
Financial markets reacted positively to the news. The Dow Jones Industrial average surged by over 500 points in the futures market on the news but fell back to a modest gain after the market opened at 9:30am.
The S&P 500 saw modest gains in the wake of the ruling, while Nasdaq rose significantly. Both indexes have since fallen.
The US dollar surged following the ruling but quickly lost the gains made, according to the US Dollar Index.
Robert England in Delaware, Amy Hinton and Daniel Hillard in Pennsylvania contributed to this story.
US, UK reach trade deal, removing Section 232 tariffs on British metal
Automotive tariffs for UK vehicle imports have been cut to 10% for the first 100,000 vehicles imported into the US — the current standard reciprocal tariff rate — with any subsequent imports still subject to a 25% duty.
It is understood that the 10% reciprocal tariff levied on material imports outside of Section 232 will still apply, meaning that scrap imports into the US from the UK still incur that duty.
The material implications of the agreement from a metals perspective were described as minimal by market participants across the aluminium, steel and scrap markets, given that the UK is not a significant exporter of those units to the US.
A failure to announce a trade deal with China or to secure trade partners among other Asian nations has made it critical for the US to make headway in another direction, sources told Fastmarkets.
Nonetheless, the deal with the UK has been instrumental in establishing the parameters of what elements of the original tariff package are open for renegotiation, namely automotive tariffs and Section 232, those same sources reiterated.
Tariffs on exports of UK steel and aluminium to the US were imposed on March 12. The US has since recognized the economic security measures taken by the UK to combat global steel excess capacity and will negotiate an alternative arrangement for steel and aluminium, the White House said, forging a deal that “will create a new trading union for the metals.”
The UK exported around 180,000 tonnes of semi-finished and finished steel to the US, worth £370 million ($492 million), in 2024, according to UK Steel. This accounted for 7% of the UK’s total steel exports by volume and 9% by value.
The outcome was “hugely significant for the British steel sector,” UK Steel said in a statement. The British trade association said the US is the UK’s second most important export market for steel, after the EU.
US exports to the UK consist mostly of specialist steel for defense, oil and gas, construction equipment and packaging applications.
The trade association said the removal of tariffs offers some respite amid challenging market conditions, citing global overcapacity and oversupply, high energy costs and weak demand.
The US’s largest sources of aluminium are Canada, the United Arab Emirates and China. In 2024, the UK was the 26th supplier of unwrought aluminium, not alloyed, and aluminium alloys, unwrought — representing 0.004% of US imports — according to data from the US International Trade Commission’s DataWeb.
“The Aluminum Association is encouraged by today’s announcement. While the aluminium trade between the US and the UK is negligible (~0.1% of all aluminium imports into the US come from the UK), the White House promised an ‘alternative arrangement to the Section 232 tariffs on steel and aluminium’ creating ‘a new trading union for steel and aluminium,’” Aluminum Association chair and chief executive officer Charles Johnson said in a statement to Fastmarkets.
“This may provide a framework for tailored trading arrangements that allow the US to combat unfairly traded Chinese aluminium in global markets while providing the flexibility needed to secure abundant, affordable metal to support more than $10 billion in industry investment made in recent years. We look forward to working closely with the White House on these plans as negotiations continue and appreciate President Trump’s continued support for a strong US aluminium industry,” Johnson continued.
A European trader told Fastmarkets they do not see much impact on the European aluminium market as the UK is not a large exporter of aluminium.
“It could send a positive message to the world to some extent that certain countries could get a good outcome from their negotiations with the US,” a second trader source said.
The second trader said Trump is “very unpredictable and he could change his mind any minute.”
“The US-UK deal demonstrates that the Trump administration is willing to work out ‘alternative arrangements’ with countries that are willing to address transshipment of China-manufactured steel,” Dan Ujczo, senior counsel, international trade and transportation at Thompson Hine, told Fastmarkets.
“This will be a reset of any quotas and the imposition of monitoring and reporting systems. It bodes well that the steel and aluminium tariffs are tactical to achieve specific results against China as opposed to permanent tariffs for most countries. Nevertheless, managed trade is the order of the day in the steel and aluminium sectors,” Ujczo continued.
Vogel Group managing principal Samir Kapadia told Fastmarkets the US-UK deal was a surprise.
“Steel and aluminium have been a no-fly zone for the White House as it related to reducing and/or eliminating tariffs. I don’t think the industry will be happy about this at all, despite the low volumes,” Kapadia said.
“It sets an odd precedent and counters much of the work done at the outset of the administration on eliminating tariff rate quotas and other exemptions. But it might show that the White House believes that the UK isn’t the problem in the global steel market. I highly doubt Canada, Mexico, Brazil and China will get similar relief,” Kapadia continued.
Unite, one of the largest trade unions in the UK and Ireland, welcomed the agreement in a statement. The union also advocated for more political action in the UK, such as reducing industrial energy costs and designating steel as critical national infrastructure area to promote British industry. Alcoa chief executive officer William Oplinger, who asked Trump for a tariff exemption in March, said high energy costs have kept the US aluminium industry from being globally competitive.
https://dashboard.fastmarkets.com/a/5229554
Rather than being buoyed by the new trade agreement, the US recycling industry remains preoccupied by the potential for the European Commission to retaliate against the Trump administration’s reciprocal tariffs.
“ReMA has significant concerns with the proposed retaliation that the European Commission has released that would not only target US exports of certain recycled materials but also seeks to impose export restrictions on EU recycled steel and aluminium products,” the Recycled Material Association’s vice president of International Trade and Global Affairs Adam Shaffer told Fastmarkets.
“The US is a net exporter of these two recyclable commodities to the EU, but the US also imported over $150 million in recycled steel and aluminium last year, so the combination of both import tariffs and export restrictions would be particularly disruptive for recyclers and manufacturers,” Shaffer continued.
“We look forward to engaging with the Trump administration to ensure that trade in recycled materials is not significantly impacted by the potential EU retaliation,” Shaffer said.
Trump eases, delays most ‘reciprocal’ tariffs, supersizes China’s
US President Donald Trump has pulled back his so-called “reciprocal” tariffs to 10% for most countries, whilst increasing the amount charged to China to 125%, Kallanish learns from a Trump social media post.
The latest adjustments, unveiled on Wednesday afternoon, pause higher reciprocal tariffs for 90 days on countries that have not directly retaliated against the US.
“More than 75 countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered reciprocal tariff during this period, of 10%, also effective immediately,” Trump announces in his message.
The tariff increase on imports from China to 125% is also effectively immediately. Earlier in the day, China had announced a boost in its tariff on US-origin imports, raising the levy to 84% from 34% (see separate story).
“China is the most imbalanced economy in the history of the modern world, and they are the biggest source of the US trade problem, and indeed, they are a problem for the rest of the world,” states US treasury secretary Scott Bessent.
Canada and Mexico are still subject to a 25% tariff on goods that do not comply with the United States-Mexico-Canada Agreement as well as the 25% tariffs on steel, aluminium and foreign autos.
“The world is ready to work with President Trump to fix global trade, and China has chosen the opposite direction,” US commerce secretary Howard Lutnick adds.
Trump gives sale of US Steel to Nippon Steel a second chance
US President Donald Trump has ordered the Committee on Foreign Investment in the United States (CFIUS) to conduct a new review of the bid submitted by Japanese steelmaker Nippon Steel to acquire US Steel, according to a statement released by the White House.
Accordingly, CFIUS will begin a fresh and confidential review to identify potential national security risks in relation to the transaction and to provide the opportunity to the parties to respond to such concerns. Also, it will help Trump determine whether further action in this matter is appropriate.
As SteelOrbis reported previously, the first lawsuit filed by the companies back in January this year had accused former US President Joe Biden of ignoring the rule of law to please the United Steelworkers (USW) union and to support his political agenda, and of influencing CFIUS to advance his political agenda, which resulted in a biased process depriving Nippon Steel and US Steel of their rightful opportunity for fair consideration.
Trump offers 90-day pause on tariffs to 75 nations willing to negotiate
US President Donald Trump offered a 90-day pause in previously announced tariff rates for 75 nations that offered to negotiate with the US to lower tariffs and remove other obstacles facing US exporters, according to an announcement on the president’s social media on Wednesday April 9.
The US imposed tariffs on all trading nations on April 2, a day called “Liberation Day” by Trump, in a negotiating strategy designed to give the US “maxmum leverage” and bring trading partners to the negotiating table, Treasury Secretary Scott Bessent said in a press event following the announcement.
The temporary pause in the tariff rates was provided because several nations offered to negotiate and because trade negotiations “take time,” and the US wants to give each nation the time needed to find a “bespoke” solution, Bessent said.
Participating nations will have temporary tariffs of 10 percent placed on them, effective immediately — substantially lower than the tariff rates announced a week earlier.
In the same social media post announcing the tariff pause, Trump raised the US’ total tariffs on China to 125%, after China imposed a second retaliatory tariff.
“China will realize that the days of ripping off the USA and other countries is no longer sustainable or acceptable,” Trump wrote.
Bessent echoed the president’s view, stating, “China is the most imbalanced economy in the history of the modern world, and they are the biggest source of US trade problems and, indeed, they are problems for the rest of the world.”
China’s neighboring countries have been among the earliest and most determined to seek negotiations, Bessent said, with talks beginning with Vietnam on Wednesday to be followed by talks with Japan, South Korea and India.
The trade talks may also address other matters, including potential collaboration with the US on investing in a potential liquid natural gas (LNG) project in Alaska that could supply gas to South Korea, Japan and Taiwan.
The US’ Section 232 tariffs on steel and aluminium, as well as automotive tariffs, are not part of the trade talks, Bessent said.
“That’s going to remain,” he said.
US duties cause gloom in Germany: WV Stahl
The announcement by US President Donald Trump of a new set of duties – a general 10% for most countries but 20% for the EU – has rung alarm bells in Germany’s steel industry.
It was a “day of gloom for trans-Atlantic trade,” says Kerstin Maria Rippel, managing director of steel federation WV Stahl.
More than any other European country, Germany depends on exports, with many goods sent to the USA containing steel, she points out. Indirect steel exports through products such as machinery or tools add up to a steel volume of 2.4 million tonnes, Kallanish hears.
German machinery makers and plant builders association VDMA underlines the short-sightedness of Trump’s measures. Importing US manufacturers need machinery suppliers from abroad for certain key technologies, representing cooperation that has existed for decades, VDMA notes. In a poll made among members, 60% of the companies stated that they will be hit, or even strongly hit, by the new US tariffs.
Meanwhile, thyssenkrupp Steel Europe and Salzgitter have called for the European Commission’s Steel and Metals Action Plan to be implemented as swiftly as possible to shield the sector from the US tariff measures, Reuters writes. Their claim was brought forward at a virtual meeting with European Commission President Ursula von der Leyen held on Monday.
The steelmakers also called for an introduction of binding minimum quotas for “European content” in private and public procurement in order to strengthen domestic markets, one participant said.
OECD: Tariffs threaten global economic growth
Geopolitical and policy uncertainty, plus further trade fragmentation, could harm global growth, the Organisation for Economic Co-operation and Development (OECD) warns.
The Paris-based institution says US President Donald Trump’s trade wars are “clouding the outlook” for worldwide economic growth.
“The global economy has shown some real resilience, with growth remaining steady and inflation moving downwards. However, some signs of weakness have emerged, driven by heightened policy uncertainty,” explains OECD secretary general Mathias Cormann. “Increasing trade restrictions will contribute to higher costs both for production and consumption. It remains essential to ensure a well-functioning, rules-based international trading system and to keep markets open.”
In its Interim Economic Outlook, the OECD estimates that global GDP growth should lower from 3.2% in 2024 to 3.1% in 2025 and 3% in 2026. The previous projection was for a 3.3% global GDP growth over the next two years.
With more trade barriers and higher-than-anticipated inflation, annual real GDP growth in the US is projected to “slow from its very strong recent pace” to 2.2% in 2025 and 1.6% in 2026. GDP growth will also slow in the eurozone to 1% in 2025 and 1.2% in 2026. Prospects in China will also soften in 2026 to 4.4% from 4.8% this year, Kallanish learns.
India, however, is set to continue growing, by 6.4% this year and 6.6% in 2026. Indonesia will see the second-largest GDP growth rate at 4.9% and 5%, respectively. Argentina and Germany, meanwhile, will see their GDP shrink by 0.2% and 1.8%, respectively in 2025.
Among several identified risks, the outlook highlights the escalation of trade restrictive measures. If bilateral tariffs were raised further on all non-commodity US imports, and countries retaliated with their tariffs, global output could fall by around 0.3% by the third year, and global inflation could rise by 0.4 percentage points per year on average in the first three years.
“The impact of these shocks would be magnified if policy uncertainty were to increase further or there was widespread risk repricing in financial markets. These would add to the downward pressures on corporate and household spending around the world,” the OECD adds.
To reduce output weakening in advanced and emerging economies, the institution recommends “ambitious structural reforms”. It says governments must enact reforms to improve productivity and enhance the adoption of new technologies by boosting market competition and eliminating excessive regulatory burdens on firms.
“Enhancing education and skills development and reducing constraints in labour and product markets that impede investment and labour mobility will be key. Artificial intelligence (AI) presents a unique opportunity to revive productivity,” it adds.
Tariffs on Canada, Mexico definitely start Tuesday
Indicating that the time for negotiations on tariffs with Canada and Mexico is over, US President Donald Trump on Monday said he will proceed with the 25% tariffs on the two countries on Tuesday, Kallanish discovers from the White House press briefing.
Trump told reporters that there is no room for Canadian or Mexican officials to negotiate a reprieve from the levies.
“Tariffs, 25% on Canada, and 25% on Mexico … will start tomorrow,” Trump confirmed during the press gathering. “So they’re going to have a tariff, and what they have to do is build their car plants, frankly, and other things, in the United States, in which case you have no tariffs.”
Mexican President Claudia Sheinbaum on Monday said she was waiting for Trump to make a decision about tariffs and that she might talk with him before the deadline. “Everything is possible,” she said.
John Isaacson USA
EU expects €28 billion loss in exports due to US steel and aluminum tariffs
According to a report by Bloomberg, the first round of the US president Donald Trump’s new steel and aluminum tariffs is expected to cost the European Union member states up to €28 billion in lost exports.
Maroš Šefčovič, European Trade Commissioner, noted that the current situation is constantly evolving, so the extent of any tariffs could still change.
European market players anticipate that the number of products affected will be four times higher than in 2018, as the list of the products subject to the tariffs also includes derivative steel items.
On February 10, Trump announced 25 percent tariffs on steel and aluminum imports from trading partners with duty-free exemptions or tariff-rate quota deals, such as the EU, as SteelOrbis previously reported.
In 2024, the EU’s steel exports to the US amounted 3.89 million mt, with the value of the exports at $6.99 billion, according to census data from the US Department of Commerce.
