Trump Hikes US Steel and Aluminium Tariffs to 50%, Spares UK
Global trade could be shaken by Donald Trump’s action, as he has just doubled steel and aluminium import tariffs to 50%, further proving his “America First” policy. Other American trading partners are rushing to react to the measures which experts are calling a new era in trade protectionism. A tariff of 50% will go into effect from June 5, 2025 which was a 25% rate until now. Things are being justified this way because of security and economic needs, as stated in the executive order. Trump issues the order based on Section 232 of the Trade Expansion Act which is frequently used to protect local industries. Speaking in front of a US Steel plant, Trump said, “When at 50%, no one will be able to challenge the steel industry. We’re taking our jobs back.” Some US manufacturers have backed the decision, but many major allies have been critical, saying it will harm economic relations between nations.
UK Temporarily Off the Hook, But Not Out of Risk
Unlike many other countries, the United Kingdom has so far avoided having to pay the additional 50% in tariffs. As a result of the agreement known as the Economic Prosperity Deal (EPD), United Kingdom metal exporters will have to deal with the original 25% duty at least until July 9, 2025. If by that date the agreement has not been approved by parliament, the 50% rate will apply to everyone. The British Trade Secretary Jonathan Reynolds said that while the exemption is positive, it still does not address the full issue. UK business leaders are worried by the uncertainty too, because many contracts have been paused until there is more understanding.
It has an effect on a broad group of countries. Canada, Mexico and European Union member states are especially vulnerable since they do a large amount of business with the United States. Complaining countries are said to be preparing their own taxes on US products, pressuring the US to reconsider the unilateral steps. Marcelo Ebrard, Mexico’s Economy Minister, said in his criticism, “Adding trade tariffs where the US is on the plus side makes no sense.” It will hurt both sides.”
Ripple Effects in the Metals Market
The metals market has already begun to react. The American Iron and Steel Institute reports that steel imports into the US fell by 17% in April. The drop in exports is predicted to increase sharply after the 50% tariff comes into effect. Nearly half of the US aluminium is supplied by Canada, so they risk losing the most. Besides, at the same time, aluminium prices at home have jumped, as industry sources suggest a nearly double increase in premium prices compared to January 2025. Because of the unstable market, some companies have stopped operating or produced less. American producers relying on imported metals have trouble as a result. The head of supply chain at a steel tool company in Illinois, Chad Bartusek, said his import bill rose by 100% within days. “This is unsustainable. The store must stop for a moment, raise prices and cut employee hours to stay open,” he said.
Economists are concerned about the host of problems that might happen if help is not provided soon. A study cited by Erica York from the Tax Foundation found that steel tariffs under Trump only led to modest job growth in steel jobs but destroyed many jobs in other industries such as automotive and construction. York believes that trade tariffs cause more damage than benefits. You deal with a leak in the roof by lighting a fire inside the house.
Trading partners with America have until June 5 to put forward new trade agreements. These deals must cover lower customs duties and promises to buy more American products. Only the UK has given a response up to now, with other European countries said to be resisting pressure from the UK to negotiate. There will probably be more efforts among nations, changes in the markets and even legal cases that go through the World Trade Organization in the near future. The possible consequences for domestic manufacturing and the chances of a new economic division are still unclear.
