Published by Global Banking and Finance Review
Posted on February 10, 2025
By Jeff Mason
ABOARD AIR FORCE ONE (Reuters) - U.S. President Donald Trump said on Sunday he will introduce new 25% tariffs on all steel and aluminum imports into the U.S., on top of existing metals duties, in another major escalation of his trade policy overhaul.
Trump, speaking to reporters on Air Force One on his way to the NFL Super Bowl in New Orleans, said he will announce the new metals tariffs on Monday.
He also said he will announce reciprocal tariffs on Tuesday or Wednesday, to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each country.
"And very simply, it's, if they charge us, we charge them," Trump said of the reciprocal tariff plan.
The largest sources of U.S. steel imports are Canada, Brazil and Mexico, followed by South Korea and Vietnam, according to government and American Iron and Steel Institute data.
By a large margin, hydropower-rich Canada is the largest supplier of primary aluminum metal to the U.S., accounting for 79% of total imports in the first 11 months of 2024.
"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."
Trump also said that while the U.S. government would allow Japan's Nippon Steel to invest in U.S. Steel, it would not allow this to become a majority stake.
"Tariffs are going to make it very successful again, and I think it has good management," Trump said of U.S. Steel.
Nippon Steel declined to comment on the latest announcements from Trump.
QUOTA QUESTIONS
Trump during his first term imposed tariffs of 25% on steel and 10% on aluminum, but later granted several trading partners duty-free exemptions, including Canada, Mexico and Brazil. Mexico is a major supplier of aluminum scrap and aluminum alloy.
Former President Joe Biden later negotiated duty-free quota arrangements with Britain, the European Union and Japan. It was not immediately clear from Trump's announcement what will happen to those exemptions and quota arrangements.
"Quebec exports 2.9 million tons of aluminum to (the U.S.), that is, 60% of their needs. Do they prefer to get supplies from China?" Francois Legault, premier of Quebec, said on X.
"All this shows that we must begin to renegotiate our free trade agreement with the United States as soon as possible and not wait for the review planned for 2026. We must put an end to this uncertainty.”
Steel mill capacity usage jumped to levels above 80% in 2019 after Trump's initial tariffs, but has fallen since then as China's global dominance of the sector has pushed down steel prices. A Missouri aluminum smelter revived by the tariffs was idled last year by Magnitude 7 Metals.
MATCHING RATES
Trump said he would hold a news conference on Tuesday or Wednesday to provide detailed information on the reciprocal tariff plan, adding that he first revealed on Friday that he was planning reciprocal tariffs to ensure "that we're treated evenly with other countries."
The new U.S. president has long complained about the EU's 10% tariffs on auto imports being much higher than the U.S. car rate of 2.5%. He frequently states that Europe "won't take our cars" but ships millions west across the Atlantic every year.
The U.S., however, enjoys a 25% tariff on pickup trucks, a vital source of profits for Detroit automakers General Motors, Ford and Stellantis' U.S. operations.
The U.S. trade-weighted average tariff rate is about 2.2%, according to World Trade Organization data, compared to 12% for India, 6.7% for Brazil, 5.1% for Vietnam and 2.7% for European Union countries.
BORDER STEPS
In a separate Fox News interview, Trump said Canada's and Mexico's actions to secure their U.S. borders and halt the flow of drugs and migrants are insufficient ahead of a March 1 tariff deadline.
Trump has threatened to impose tariffs of 25% on all Mexican and Canadian imports unless America's two largest trading partners take stronger actions. He paused the tariffs until March 1 after some initial border security concessions from the two countries, with Mexico pledging to add 10,000 National Guard troops to its border and Canada deploying new technology and personnel and taking new anti-fentanyl steps.
Asked whether Mexico's and Canada's actions were good enough, Trump replied: "No, it's not good enough," Trump said. "Something has to happen, it's not sustainable, and I'm changing it."
Trump did not say what Canada and Mexico needed to do to avoid broad tariffs on March 1.
(Reporting by Jeff Mason and David Lawder; Writing by David Lawder in Washington; Additional reporting by Lidia Kelly in Melbourne, David Ljunggren and Costas Pitas; Editing by Lisa Shumaker and Lincoln Feast.)
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