Josh Balk, Paul Wiseman, Rob Zillies, The Associated Press
WASHINGTON (AP) — President Donald Trump officially increased tariffs on all steel and aluminum imports to 25% on Wednesday, pledging that taxes will help create jobs for U.S. factories when taxes are shaking stock markets and causing fears of economic slowdowns.
In addition to increasing the tariff on aluminum from 10%, Trump removed all exemptions from 2018 tariffs on metals. His move, based on the February directive, is part of a broader effort to disrupt and transform global commerce. The Republican president has separate tariffs on Canada, Mexico and China, and plans to tax imports from the European Union, Brazil and South Korea from April 2nd by charging “mutual” fees.
The EU announced its own measures on Wednesday. European Commission President Ursula von der Leyen said the United States is “addling with 26 billion euros worth of tariffs as it applies to tariffs worth $28 billion.” These measures, which cover not only steel and aluminum products, but also textiles, home appliances and agricultural products, are expected to take effect on April 1st.
Canada is the largest foreign supplier of steel and aluminum in the US, and has responded with its own measures.
It plans to impose Canadian retaliatory tariffs on $20.7 billion starting Thursday, in response to US taxes on metals. New Canada’s tariffs will use US goods including steel and aluminum products and $9.9 billion worth of computers, sports goods and water heaters.
“We will not stand vaguely while our iconic steel and aluminum industries are unfairly targeted,” said Canadian Finance Minister Dominique LeBlanc.
Canada’s new tariffs add to a 25% rebel against US$20.8 billion imports from the US introduced on March 4, in response to other Trump import taxes that are partially delayed by one month on March 4.
Trump told Business Roundtable CEO on Tuesday that tariffs have led businesses to invest in U.S. factories. A 8% drop in the S&P 500 stock index on fear of growth worsening seems unlikely to give him a opinion, as Trump argued that higher tariff rates would be more effective in reviving factories.
“The higher it is, the more likely they are to build,” Trump told the group. “The biggest victory is whether they move to our country and create jobs. It’s a bigger victory than the tariffs themselves, but tariffs will throw a lot of money on this country.”
Trump on Tuesday threatened to put 50% tariffs on Canada’s steel and aluminum, but he chose to stay at the 25% rate after Ontario halted plans to charge additional charges on electricity sold to Michigan, Minnesota and New York.
In many respects, the President is working on what he sees as an unfinished business from his first semester. Trump has increased tariffs significantly, but the revenue collected by the federal government was too small to significantly increase overall inflationary pressure.
Trump’s 2018 tariffs on steel and aluminum were eroded by exemptions.
They avoided import taxes on metals after Canada and Mexico agreed to a request for an improved North American trade agreement in 2020. Other US trading partners had import quotas to replace tariffs. Also, the first Trump administration allowed US companies to request a tariff exemption if, for example, they were unable to find the necessary steel from domestic producers.
Trump’s tariffs could support US steel and aluminum plants, but could raise prices for manufacturers using metal as raw materials.
Furthermore, economists found that the benefits of the steel and aluminum industries were offset by the costs imposed on “downstream” manufacturers using the products.
These downstream companies saw their production drop nearly $3.5 billion due to tariffs in 2021. This is a loss that exceeded a $2.3 billion increase in production by the US International Trade Commission’s aluminum producers and steel manufacturers discovered in 2023.
Trump believes tariffs will lead to more domestic factories, and the White House notes that Volvo, Volkswagen and Honda are all investigating an increase in the US footprint. However, due to rising prices, lower sales and lower profits, some companies may refrain from investing in new facilities.
“If you’re a meeting room executive, are you really going to tell your board it’s time to expand that assembly line?” said John Murphy, senior vice president of the U.S. Chamber of Commerce.
According to the International Trade Bureau, top steel exporters to the US are Canada, Mexico, Brazil, Brazil, South Korea and Japan, with exports from Taiwan and Vietnam growing rapidly. Imports from China, the world’s largest producer of steel, account for only a small portion of what the US purchases.
The majority of US aluminum imports come from Canada.
Original issue: March 12, 2025 7:50am EDT
