New Steel and Aluminum Tariffs Using his authority under Section 232 of the Trade Expansion Act of 1962, President Trump expanded steel and aluminum tariffs to cover all imports from all countries. Ad valorem tariff rates for steel imports remain at 25%, and those for aluminum imports have increased from 10% to 25%. President Trump also makes significant reforms to the scope, country exemptions, and exclusions to include:
- Eliminating all country exemptions or quotas provided to Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom;
- Expanding the scope of tariffs to include downstream derivative steel and aluminum products; and
- Eliminating all product and general approved exclusions provided by the Bureau of Industry and Security.
The new measures take effect on Tuesday, March 12.
The move, aimed at revitalizing U.S. industry and countering unfair trade practices, drew mixed reactions. Supporters, including the Steel Manufacturers Association, praised the tariffs as a measure to "level the playing field," while critics warned of higher costs for goods, strained alliances, and inadequate resolution of underlying trade issues. The White House defended the tariffs as necessary to address exploitation of exemptions and strengthen domestic production, but the decision reignited tensions with allies like Canada and the EU, potentially triggering retaliatory measures.
While the president has the authority to impose such tariffs under Section 232 of the Trade Expansion Act of 1962, these actions have been subject to legal challenges and disputes within the World Trade Organization (WTO). In December 2022, the WTO ruled against the United States in cases brought by several countries, stating that there was no national security emergency justifying the tariffs.
Read details on the aluminum tariff EO here and the steel tariff EO here.
Response from Impacted Countries
The recent imposition of a 25% tariff on steel and aluminum imports by the United States has significant implications for major trading partners, particularly Canada, Mexico, and Brazil. Canada, as the largest supplier of these metals to the U.S., faces increased costs and potential disruptions in industries such as automotive manufacturing. Mexico, also a key exporter, is similarly affected, with the tariffs posing challenges to the USMCA and potentially straining trade relations. These tariffs impact Brazil, another major supplier, which may disrupt its steel exports to the U.S.
Canadian Prime Minister Justin Trudeau has denounced the U.S. administration's recent 25% tariffs on steel and aluminum imports as "unacceptable" and "entirely unjustified," emphasizing the potential harm to Canadian and American industries. He has pledged that Canada will respond "firmly and clearly" to these measures if necessary, highlighting the importance of collaboration over conflict between the two nations. Other leaders, including Mexico's Economy Minister Marcelo Ebrard and European Commission President Ursula von der Leyen, have also criticized the tariffs, with the EU announcing plans for "firm and proportionate countermeasures."
Expected Reciprocal Tariffs
President Donald Trump announced plans to introduce reciprocal tariffs last week, aligning U.S. duties with those imposed by other countries, marking a shift from his earlier proposal of universal tariffs on all imports. White House Deputy Chief of Staff for Policy, Stephen Miller, also highlighted foreign country VATs as a potential factor for reciprocal tariffs. Speaking alongside Japanese Prime Minister Shigeru Ishiba, Trump emphasized the goal of equal treatment in trade, saying, “We don’t want any more, any less.” He indicated the new policy would likely be unveiled early this week, aiming to match tariffs country-by-country rather than imposing a flat rate. Trump highlighted disparities, such as the U.S.'s lower car tariff of 2.5% compared to higher foreign rates, though he did not clarify if there would be exceptions to the new duties.
Are you impacted by reciprocal tariffs or adjusted steel and aluminum tariffs? Please contact Sarah Helton, Michael Best Strategies’ Trade Practice Lead at sarah.helton@michaelbest.com for assistance. |