President Donald Trump has officially raised tariffs on all steel and aluminum imports to 25%, eliminating previous exemptions and reinforcing his broader trade policy aimed at reshaping global commerce.
Announced on Wednesday, the tariff hike builds on Trump’s 2018 metal tariffs, which initially set aluminum duties at 10%. The move is part of a strategy to push companies toward U.S.-based manufacturing. However, the escalation has rattled financial markets, fueling concerns over economic growth.
The newly imposed tariffs affect Canada, Mexico, China, and upcoming targets, including the European Union, Brazil, and South Korea. Trump has stated that these measures, set to take full effect on April 2, will ensure “reciprocal” trade practices.
Speaking at a Business Roundtable meeting on Tuesday, Trump claimed the tariffs were driving investments into U.S. factories despite stock market volatility. Over the past month, the S&P 500 has dropped 8%, reflecting investor fears of economic strain. However, Trump remains firm in his approach.
“The higher it goes, the more likely it is they’re going to build,” Trump told business leaders. “The biggest win is if they move into our country and produce jobs. That’s a bigger win than the tariffs themselves, but the tariffs are going to be throwing off a lot of money to this country.”
On Tuesday, Trump considered imposing a 50% tariff on steel and aluminum imports from Canada. However, after Ontario suspended plans to add a surcharge on electricity sold to Michigan, Minnesota, and New York, he opted to maintain the 25% rate.
The tariff expansion revives unfinished business from Trump’s first term, where his initial tariffs faced exemptions and workarounds. In 2020, Canada and Mexico secured relief after renegotiating the North American trade deal. Other trading partners replaced tariffs with import quotas, and U.S. companies could request exemptions when domestic supply was insufficient.
While the tariffs may benefit domestic steel and aluminum producers, they also raise costs for industries that rely on these metals. The U.S. International Trade Commission reported in 2023 that in 2021, metal tariffs led to a $3.5 billion production decline in manufacturing sectors using steel and aluminum—outweighing the $2.3 billion production gain in those industries.
Despite these concerns, Trump sees tariffs as a catalyst for domestic manufacturing expansion. The White House has pointed to Volvo, Volkswagen, and Honda as companies considering increased U.S. investments. However, industry leaders caution that economic uncertainty may deter major expansions.
“If you’re an executive in the boardroom, are you really going to tell your board it’s the time to expand that assembly line?” questioned John Murphy, senior vice president at the U.S. Chamber of Commerce.
With businesses weighing the long-term effects, Trump’s tariff policies continue to reshape America’s trade landscape—whether as a manufacturing revival or an economic gamble.
