Trump will impose 25% tariffs on Steel and Aluminum
The US president said he planned sweeping tariffs on all steel and aluminum imports on Monday and would take other action to even out tariff rates with the rest of the world later this week.
Donald Trump has said he will announce new 25% tariffs on all steel and aluminum imports into the US on Monday that would affect “everybody’, including its largest trading partners Canada and Mexico, in another major escalation of his trade policy overhaul.
Trump’s pre-announcement came as China’s retaliatory tariffs, announced last week, came into effect. The measures target $14bn worth of products with a 15% tariff on coal and LNG, and 10% on crude oil, farm equipment and some vehicles.
The US president, speaking to reporters on Air Force One on Sunday, also said he would announce reciprocal tariffs – raising US tariff rates to match those of trading partners – on Tuesday or Wednesday, which would take effect “almost immediately”. “And very simply, it’s, if they charge us, we charge them,” Trump said of the reciprocal tariff plan.
The move on steel and aluminum brought a swift reaction from Doug Ford, the premier of the Canadian province of Ontario, who accused the US president of “shifting goalposts and constant chaos” that would put the economy at risk.
Monday’s tariffs would come on top of existing metals duties.
Amid wider pushback against Trump’s economic heavy-handedness, French President Emmanuel Macron warned in an interview broadcast on Sunday that he was willing to go “head-to-head” on tariffs with the US president. “I already did so, and I will did (sic) it again.”
Macron told CNN that the EU should not be a “top priority” for the US, saying: “Is the European Union your first problem? No, I don’t think so. Your first problem is China, so you should focus on the first problem.”
Macron said tariffs would harm European economies but also the US, given the level of economic ties. “It means if you put tariffs on a lot of sectors, it will increase the costs and create inflation in the US. Is it what your people want? I’m not so sure,” he said.
He said the EU must be ready to react to US actions, but stressed that the 27-nation bloc should mainly “act for ourselves”. “This is why, for me, the top priority of Europe is competitiveness agenda, is defence and security agenda, is AI ambition, and let’s go fast for ourselves.
“If in the meanwhile, we have [a] tariff issue, we will discuss them and we will fix it.”
Trump has long complained about the EU’s 10% tariffs on auto imports being much higher than the US car rate of 2.5%. He frequently states that Europe “won’t take our cars” but ships millions west across the Atlantic every year.
Chinese steel outflows, output vexes global industry
China’s steel industry was among the main concerns in the global steel market amid growing steel exports.
At the Irepas steel industry conference held in Paris on Sept. 16, Wee-Jin Yeoh, secretary general of the South East Asia Iron and Steel Institute, said the rise of Chinese export volumes to Southeast Asia and planned capacity expansions in that region are “unsustainable,” making the next two years difficult for the region amid a trend towards “de-greening.”
China has increased exports in recent years due to capacity utilization at over 80% while domestic demand has been decreasing. On Aug. 13, China’s Baowu Steel Group warned that China’s steel industry is facing a more severe situation than seen in 2008 and 2015 amid plummeting domestic Chinese prices.
China predominantly exports flat steel products to Southeast Asia, amounting to 25 million mt, or 28%, of China’s total steel exports in 2023, according to SEAISI.
Overcapacity in Southeast Asia will lead to an “explosion” of carbon emissions in the region, Yeoh said. Southeast Asia still has relatively young blast furnaces, with comparatively high carbon emissions and will see new blast furnace-basic oxygen furnace capacities come on stream. SEAISI expects 83% of steel production in the region to be done in blast furnaces by 2030, up from 71% in 2024.
Trade barriers on the rise
China’s rapid increase in cheaply priced steel product exports to many regional markets over the past two years has heightened protectionism worldwide with further escalation possible, while global steel prices are likely to remain low, GMK Center, a Ukraine-based steel consultancy, said in a report Sept. 18.
Steel anti-dumping investigations worldwide rose to 14 as of early July from five in 2023, of which 10 and three, respectively, concerned Chinese products, according to GMK.
Among countries and regions already imposing restrictions or conducting AD probes against Chinese steel products are: the European Union, the US, Canada, Vietnam, Turkey, Mexico, Brazil, Thailand, South Africa, and Saudi Arabia, GMK said.
China’s finished steel exports in August rose 21.3% from July and 14.7% from a year earlier to 9.50 million metric tons, the third highest so far in 2024, the country’s customs data showed.
Over January-August, the Chinese exports increased 20.6%, or 12.03 MMt, from the year before to 70.58 MMt.
Its finished steel exports are on track to surpass 100 MMt in 2024 for the first time since 2016, after rising in August, market participants told S&P Global Commodity Insights.
“Under these circumstances, protectionist trade policies for steel products have become more evident not only in Europe and the US but also in Asia, and Japan is now in a situation where some concrete countermeasures are necessary,” Tokyo Steel said as it cut its October list prices in September.
