Why Trump Wants Higher Tariffs on Steel and Aluminum

As he tries to reshape US trade ties with the rest of the world, President Donald Trump has unveiled a new tariff threat: He’s pledged to impose a 25% levy on US imports of steel and aluminum, which were valued at almost $50 billion in 2024. While the move is aimed at strengthening domestic production, it carries implications for the wider economy, given that the US relies on imports to meet a large portion of demand for the metals in sectors such as construction, auto manufacturing, drinks packaging and the production of military equipment.

Trump has , then paused, blanket 25% tariffs on imports from Canada and Mexico, then went ahead with new 10% taxes on goods from China. The latest plan carries echoes of the president’s first administration, when steel and aluminum imports were subjected to tariff hikes following years of complaints from American companies and labor unions.

What are the new tariffs Trump is threatening?

The president said he would announce 25% levies on imports of steel and aluminum, and that these tariffs would apply to “everybody” — meaning all nations. He didn’t give a timeline, and his brief comments didn’t address how the levies would fit with existing tariffs, or with his lingering threat to hit all Mexican and Canadian goods with new import charges.

Why steel and aluminum?

During Trump’s first successful presidential campaign a decade ago, he railed against the decline of US steeltowns and aluminum hubs after decades of falling production and dwindling employment amid China’s rise as the world’s manufacturing superpower.

In 2018, during his first term in the White House, Trump imposed tariffs of 25% on steel imports and 10% on aluminum imports. His aim was to reboot US output by making foreign material more expensive for American buyers. Several major suppliers including Canada, Mexico and the European Union were ultimately exempted, however. Today, US industries say they’re still struggling to compete with imports.

More broadly, trade frictions in the global steel and aluminum sectors have grown in the past year amid a renewed flood of product from China. That’s prompted trade measures against Chinese imports from numerous places such as Vietnam, India and the EU.

Which countries could be most affected by the metals tariffs?

US net imports make up more than four-fifths of the country’s aluminum requirement, and about 17% of its steel needs, according to figures from Morgan Stanley.

Canada could bear the brunt of tariffs as the top supplier of both metals to its southern neighbor. It accounts for 58% of US aluminum imports by volume, followed by 6% from the United Arab Emirates, and 4% from China, according to figures from the US government. For steel, Canada is again the biggest at 23%, followed by Brazil at 16%, Mexico at 12%, then South Korea at 10%.

What will happen next?

While Trump has set out the plan in broad terms, his record in office — in his first term and so far in his second — suggests there’s room for negotiation. Several exporting nations or regions ultimately won exemptions from the metals tariffs launched earlier, while some oil companies also won exclusions based on their need for special products.

Also, it’s not clear how new steel and aluminum tariffs would relate to trade measures already in place. For example, it’s not known whether the new metals tariffs would be added to other levies, for example, the new blanket 10% tariff on all Chinese goods and an older 25% tariff in place on Chinese steel.

Trump has said he wants to impose tariffs on  and that those would  to implement than the ones on aluminum and steel.

Will the tariffs achieve their purpose?

When Trump’s first administration unveiled tariffs on steel and aluminum, the goal was to make the US more self-sufficient in these metals. But in 2024, the output of the US steel industry was 1% lower than it had been in 2017, before the first round of Trump tariffs, and the aluminum industry produced almost 10% less.

Rising costs — especially for labor and energy — have been a major driver in the long-term decline of these industries. Canada plays a vital role in supplying aluminum to the US because its plants often draw on cheap hydropower.

While tariffs can support expanded domestic production, the result can be inflation that ends up .