New Tariffs Incoming on Steel and Aluminum

On February 10, 2025 President Trump signed proclamations to eliminate exemptions and special provisions on Section 232 tariffs (tariffs on steel imports) and resetting them to 25% across the board with no exceptions. Additionally, the Aluminum tariff will be raised to 25%. The tariffs will take effect on March 4, 2025. These tariffs are also in addition to other tariffs that already exist so if you're importing steel from Canada, you could potentially be paying as much as 50% tariff rate. Of course some of that depends on what happens with the delay in the 25% Canada/Mexico tariffs, but we can assume that you're probably looking at paying 50%.

The problem with reporting this as a definite not exceptions, across the board 25% tariff is maybe it isn't. There have already been promises from the Trump administration to "look at" and "work with" the UK, Australia, and Canada to see if they can continue to enjoy reduced tariff rates but these appear to be just words.

Many are asking why? The reasoning behind the tariff is that when the Trump administration looks at raising tariff rates and especially looking at China rates when his first administration raised their rates to 25% there was a distinct drop of imports and a rise in production domestically for steel and aluminum. There have been studies done in the 2020s that also point to reliance on foreign steel to be a national security issue and so recommendations are that domestic production needs to be increased. The problem with the numbers is that there was a nasty little global pandemic going on at the time as well and those numbers are likely skewed because ALL international trade slowed and supply chains were slowed and stretched. So how much can we trust those numbers?

But if we look at the numbers, remembering that China imports (at the time, the greatest exporter of steel to the US) due to the 301 tariff program and ongoing anti-dumping and countervailing duties and the pandemic were greatly reduced, US steel production went up by 6% and a further 2% after that. That's good, right? Not necessarily, the domestic production increase wasn't even close to being able to fulfill the needs of the companies needing steel so companies turned to Canada and other foreign sources not only because of production capabilities but also foreign steel is simply cheaper than US steel. The further problem is that the US steel industry simply isn't equipped to handle the volume needed nor the ability to ramp up production at the pace needed at the drop of a hat. But what does all of this mean?

If we really look at the numbers, importers will be less likely to import from certain high tariff rates such as China, Mexico and Canada. The reality will most likely be that steel and aluminum from certain high contributing countries will no longer be viable and trade will suffer but other countries will step up, even with a 25% tariff, in the short term. Sure, American production may ramp up eventually, but it takes time. There will be no 50% jump in production on day 1 as that is impossible. Yes, China, Canada, and Mexico will be the heaviest hit (though imports from China are only about 2% now anyway) but there will likely be a jump in certain Southeast Asian and South American markets after the initial shock as those countries will have the cheapest steel and aluminum.

UPDATE: We have been asked many questions over the last month about steel and aluminum derivatives. There is a list of roughly 280 HTS subheadings (the derivatives list consists of those subheadings and their 10 digit classifications) aside form the material itself which is also receiving the extra 25% tariff. Anything from nails to door frames and many parts in between. Please remember if you're importing steel or aluminum goods and parts to the US make sure to inquire with us or your customs broker before you ship so you have an idea of the tariffs you'll be paying.