Trump to announce tariffs on steel and aluminium, with more coming

President Donald Trump said he will announce on Monday that the United States will impose 25% tariffs on all steel and aluminium imports, including from Canada and Mexico, as well as other import duties later in the week.

“Any steel coming into the United States is going to have a 25% tariff”, he told reporters on Sunday, speaking on Air Force One as he flew from Florida to New Orleans to attend the Super Bowl. When asked about aluminium, he responded: “Aluminium, too” suggesting they will be part of the trade penalties.

Trump also reiterated that he would announce “reciprocal tariffs” – “probably Tuesday or Wednesday” – meaning that the US would impose import duties on products in cases where another country has levied duties on US goods.

“If they are charging us 130% and we’re charging them nothing, it’s not going to stay that way”, he told reporters.

Indications he means business

Trump’s comments are the latest example of his willingness to threaten, and in some cases to impose, import taxes. Tariffs are coming much earlier in his presidency than during his previous four years in the White House, when he prioritised tax cuts and deregulation. Trump has alternately said he sees import taxes as tools to force concessions on issues such as immigration, but also as a source of revenue to help close the government’s budget deficit.

The US President did not offer any details about the steel and aluminium duties, or the reciprocal tariffs. Trump had previously threatened 25% import taxes on all goods from Canada and Mexico, although he paused them for 30 days barely a week ago. At the same time, he proceeded to add 10% duties on imports from China.

Some contradictory messages

However, on Friday, he said he would also delay the tariffs on the millions of small packages – often from fast-fashion firms such as Temu and Shein- until customs officials can work out ways to impose them. The small packages have previously been exempt from tariffs.

Trump’s latest remarks has stirred immediate worry from some global trading partners.

South Korea’s acting president, Choi Sang-mok, called a meeting with the country’s top foreign policy and trade officials on Monday to examine how Trump’s proposed tariffs on steel and aluminium would affect its industries.

The office of Choi, who also serves as the country’s finance minister, said officials discussed the potential impact and Seoul’s possible responses, but specific details of the meeting were not disclosed.

The stock prices of major South Korean steelmakers, including POSCO and Hyundai Steel, dropped as the market opened on Monday. South Korea shipped about $4.8 billion (€4.65bn) worth of steel to the United States from January to November last year, which accounted for 14% of its global exports of the products during the period.

Market reactions and impact of tariffs

Financial markets fell on Friday after Trump first said he would impose the reciprocal tariffs. Stock prices also dropped after a measure of consumer sentiment declined on Friday, largely because many respondents cited tariffs as a growing worry. The survey also found that Americans are expecting inflation to rise in the coming months because of the duties.

On Monday, global markets were still weak, following Trump sharing his plans for steel and aluminium import tariffs. The S&P 500 was down 0.95% on Monday morning, with the Dow Jones Industrial Average also dropping 0.99%, and the Nasdaq Composite index being 1.36% lower.

The STOXX 600 index rose 0.22% on Monday morning, with the DAX also inching up 0.30%.

Safe-haven gold continues to rise

Gold surged 1.20% on Monday morning, to a new record high of $2,893 (€2,806.5) per ounce, boosted by soaring safe-haven demand and expectations of monetary policy loosening. The US dollar also strengthened its gains, rising to 108.3 on Monday morning.

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Regarding the impact of the tariffs, IG said: “This move, seen as inflationary, could limit the Federal Reserve’s ability to cut rates further. The tariffs heightened fears of an escalating trade war, especially as China’s retaliatory tariffs took effect and the EU vowed swift responses.

“Investors reacted cautiously, with the Australian dollar and euro dipping, while Wall Street futures initially fell but later rebounded. Meanwhile, oil prices edged up after recent losses, though concerns over global economic growth persist.”

Trade war effects cause concerns

Trump’s planned steel and aluminium tariffs have led to increasing worries about their impact on the US steel and aluminium industry, and the potential for job losses. If tariffs go ahead, it could also result in retaliatory actions from other countries, thus escalating the potential for a global trade war.

Currently, Canada and Mexico are two of the US’s largest steel trading partners, with Canada also being the US’s biggest aluminium supplier.

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Regarding the steel and aluminium tariffs, Doug Ford, the premier of the province of Ontario, Canada, said in an online post on X, previously known as Twitter: “This is the next four years. Shifting goalposts and constant chaos, putting our economy at risk.

“I’m asking the people for a strong, stable, four-year mandate that outlasts the Trump administration to do whatever it takes, to always be ready to protect Ontario.”