President Donald Trump is expected to introduce new 25 per cent tariffs later on Monday on all steel and aluminium imports into the U.S., on top of existing metals duties, in another major escalation of his shake-up of trade policy.
As the risk mounts of a multi-front trade war, the European Union flagged it may retaliate and Trump promised further announcements on Tuesday or Wednesday of broader reciprocal tariffs to match those of countries importing U.S. goods.
Shares in European and Asian steelmakers fell while their U.S. counterparts rose.
Speaking to reporters on Air Force One on his way to Sunday’s NFL Super Bowl in New Orleans, Trump said he would announce the metals tariffs on Monday and the reciprocal tariffs soon afterwards, adding “if they charge us, we charge them.”
The largest sources of U.S. steel imports are Brazil, Canada and Mexico, followed by South Korea and Vietnam, according to government and American Iron and Steel Institute data.
Meanwhile, Canada, whose extensive hydropower resources aid its metal production, accounted for 79 per cent of U.S. primary aluminium imports in the first 11 months of 2024.
During his first four-year term from 2017, Trump imposed tariffs of 25 per cent on steel and 10 per cent on aluminium.
But he later granted several countries exemptions, including Australia, Brazil, Canada and Mexico, and his successor Joe Biden later negotiated duty-free quota deals with Britain, Japan and the EU.
With more demands for exemption and negotiation in prospect, some said Trump’s action would first of all damage the U.S. economy by raising the cost of the raw materials it depends on.
“Canadian steel and aluminum support key industries in the U.S. from defence, shipbuilding and auto,” Canadian Innovation Minister Francois-Philippe Champagne posted on X.
“We will continue to stand up for Canada, our workers, and our industries.”
Australia, also a strategic U.S. ally, has been making representations on aluminium and steel for months.
“Australian steel and aluminium are creating thousands of good paying American jobs, and are key for our shared defence interests,” Trade Minister Don Farrell said.
In South Korea, the Industry Ministry called in steelmakers to discuss how to minimise the impact of tariffs.
Hyundai Steel 004020.KS shares dipped by as much as 2.9 per cent amid a broader decline among South Korean steelmakers.
European steelmakers account for about 15 per cent of imports into the United States, and shares in ArcelorMittal MT.LU, MT.AS and Voestalpine VOES.VI slipped between 1.3 per cent and 2.5 per cent. Germany’s ThyssenkruppTKAG.DE and Salzgitter SZGG.DE were little changed.
The European Commission said it saw no justification for the imposition of tariffs: “We will react to protect the interests of European businesses, workers and consumers.”
It said Commission President Ursula von der Leyen would meet U.S. Vice President JD Vance in Paris on Tuesday during an AI summit. The German government said it was “working towards ensuring that these measures [tariff increases] do not materialise”.
Shares in U.S. steel and aluminium makers jumped.
Nucor NUE.N, U.S. Steel X.N, and Cleveland-Cliffs CLF.N rose between 6% and 10% in premarket trading, while Century Aluminum CENX.O added 8.5% and Alcoa AA.N five per cent
Trump also said that, while the U.S. government would allow Japan’s Nippon Steel 5401.T to invest in U.S. Steel X.N, it would not allow a majority stake.
“Tariffs are going to make (U.S. Steel) very successful again,” Trump said.
Nippon Steel declined to comment, but Japan’s Chief Cabinet Secretary Yoshimasa Hayashi said the company was considering a bold change in plan.
U.S. steel mill capacity usage jumped above 80% in 2019 after Trump’s initial tariffs, but has since fallen as China’s global dominance – unaffected by its exclusion by tariffs from the U.S. market – has pushed down prices.
Sourse: breakingnews.ie
