Trump threatens new 10% global tariff under Section 122 after Supreme Court deems IEEPA tariffs illegal
The order would be issued under Section 122 of the Trade Act of 1974, Trump said, adding that the new duties could apply on top of existing tariffs.
The provision allows the president to impose tariffs as high as 15% for as long as 150 days on any country, in response to “large and serious” balance of payments problems. It does not require an investigation or other procedural steps.
Trump also noted on Friday that he will invoke separate authority under Section 301 to initiate investigations into unfair trade practices, a process that not only could take several months to complete, but could ultimately yield additional tariffs.
The announcement came just hours after the Supreme Court ruled that Trump has acted illegally in unilaterally imposing sweeping global tariffs under the supposed authority of the country’s International Emergency Economic Powers Act (IEEPA).
“There was always the notion that [implementing the IEEPA tariffs] was a risk, that the administration was taking a risk with expanding the mandate at a scale that’s never been done before,” Samir Kapadia, managing principal of the Vogel Group, told Fastmarkets in an interview on Friday.
The Supreme Court ruling held that only the US Congress, not the president, has the power to impose taxes, with trade sources saying that some market participants were caught off-guard by the decision.
US Supreme Court strikes down Trump’s Liberation Day tariffs
According to the majority opinion, written by Chief Justice John Roberts, “IEEPA does not authorize the President to impose tariffs.”
Uncertainty over new tariffs ‘killing’ US steel demand
President Trump’s announcement of potential new tariffs that exceed the initial “reciprocal” rates unveiled on April 2’s Liberation Day has increased uncertainty in the US steel market and the risks to global trade.
Brazil, Canada, the EU and Mexico have received notice that their tariffs could increase further unless trade talks progress ahead of the new August 1 deadline. These “reciprocal” tariffs cannot be applied to US steel imports on top of the existing Section 232 tariffs. However, higher baseline tariffs would raise the cost of US steelmakers’ raw materials, applying upward pressure to steel prices and increasing uncertainty among steel buyers in a climate of low demand.
MEPS US steel market analyst, Laura Hodges, said: “There is not a lot of good news for US steel buyers right now. Interest rates remain high, activity remains cautious and the latest tariff announcements only acerbate this situation.
“We continue to hear from MEPS respondents that it is impossible to plan in this uncertain environment. This ‘wait and see’ approach is killing steel demand.”
Tariff threats aim to accelerate trade talks
Trade negotiations have been slower than the US government anticipated. Originally, a July 9 deadline was set, after which country-specific reciprocal tariffs above a 10% base rate would take effect. Last week, this deadline was extended to August 1.
To accelerate talks, the US government has issued letters outlining new baseline tariff rates to over 20 countries and the EU. Brazil’s rate was raised to 50%, while the EU now faces a 30% tariff, up from 20%, if progress is not made in trade negotiations. Tariffs on Mexico and Canada were increased to 30% and 35% respectively, though these apply only to good that do not comply with the United States-Mexico-Canada Agreement.
So far, only two preliminary trade deals have been announced, with the United Kingdom and Vietnam. Of these, only the UK agreement has been formally communicated, and parts of that deal are now at risk. The UK secured a lower 25% tariff on steel imports into the US. However, this exemption was linked to conditions that must be met by the country’s government by the July 9 deadline. No formal announcement has yet been made and there remains a risk that US tariffs on UK steel imports could revert to the full 50% Section 232 rate.
“Reciprocal” tariffs’ influence on US steel sector
While not directly applicable to steel imports, higher baseline “reciprocal” tariffs could affect US steel demand in several ways. Section 232 tariffs do not cover steelmaking raw materials such as scrap, pig iron and DRI. However, these inputs remain subject to the “reciprocal” tariffs which currently sit at 10% for most countries. Brazil supplies about 30% of total US imports of these materials. If its baseline tariff rises to 50%, it will increase production costs and could weaken downstream demand.
Persistent uncertainty continues to weigh on steel buyers, who have largely stayed on the sidelines, in 2025, as they await clarity on US trade policy.
Against this backdrop of lacklustre demand, respondents to MEPS’s research for its International Steel Review indicate that steel prices have shown limited upward momentum since the doubling of the Section 232 tariff to 50% on June 4. The July contract price for hot rolled coil on the Chicago Mercantile Exchange (CME) reflects this. Having jumped from USD801 per short ton on May 30 to USD923 on June 4, prices have since dropped by almost USD50 per short ton.
With less than three weeks until August 1, the scarcity of finalised trade deals suggest the possibility of yet another extension, prolonging uncertainty and keeping demand sluggish. The likelihood that the 50% Section 232 tariff might be reduced through these negotiations also appears to be decreasing.
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.