President Donald Trump signed an executive order to raise tariffs on aluminum and steel imports to 50% starting June 4. His decision came days after promising domestic steel manufacturers that he would protect their industry and increase tariff rates.
In a proclamation, the White House detailed that the previous 25% tariffs did not help the local industries grow and sustain production levels necessary to meet national defense goals.
It further stated that increasing tariffs would bolster domestic industries and lessen national security risks posed by steel and aluminum imports.
Companies hoped the 50% tariffs on steel would be temporary
Trump’s raised steel tariffs will leave out the UK. According to the signed order, UK steel exports to the US will only be subjected to the previous 25% levy before the two countries discuss new rates by July 9.
The US is still in active negotiations with multiple countries over its earlier “reciprocal tariffs.” However, the president’s decision to add steel and aluminum import rates may cultivate more trade tensions.
Some analysts even stated that the new rates could harm foreign steel manufacturers and potentially trigger retaliation, which would only burden American consumers more.
Just hours before Trump increased the tariffs, many affected companies hoped the plan was temporary or a bargaining tactic. Rick Huether, CEO of Independent Can Co, a company that imports steel from Europe for its products, even commented, “Always the question with Mr Trump is, is this a tactic or is this a long-term plan?”
He claims he paused investment plans out of concern that sudden shifts and higher prices might drive customers to switch to plastic or paper products.
More uncertainty brewed on Friday when Trump suggested selling the United States Steel Corp plant in Pennsylvania to Japan’s Nippon’s Steel Corp, promising the US plant would retain some control.
UK’s Stance believes a 50% steel tariff on the country’s exports would be catastrophic
Globally, the US is still the largest importer of steel after the European Union, despite reduced imports since Trump imposed his first tariffs.
Steel imports dropped 17% in April from March, and foreign steel producers expect further drops due to Trump’s latest announcement.
In March, the steel tariffs nearly triggered Canada and the European Union to impose retaliatory measures on American exports to their countries.
Olof Gill, the European Commission’s spokesperson for economic security and trade, claimed that they were still negotiating with the US. He hopes the US will withdraw their recent tariff threat as they have done before with other levies.
Trump’s announcement has also pressured the UK to settle on a better trade deal to protect it from the March metals tariffs.
After meeting with US Trade Representative Jamieson Greer on Wednesday, UK Trade Secretary Jonathan Reynolds said his nation will work with the US to implement their agreement to remove the 25% US tariffs on steel.
Gareth Stace, director general of UK Steel, stated that a 50% tariff would be “catastrophic” on UK exports to the US, arguing that with the March tariffs, steel orders have been canceled and delayed.
Still, the fate of Trump’s tariffs remains uncertain, especially after a federal trade court recently struck down many of the duties he imposed under emergency law. However, the court’s ruling did not affect his tariffs on metals.
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