Trump to announce 25% tariffs on steel and aluminium, 'reciprocal duties'

President Donald Trump said he will announce on Monday (February 10) that the United States will impose 25 per cent 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 per cent tariff,” he told reporters on Sunday 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” will be subject to the trade penalties.

‘Tariffs will cover everybody’

When he was asked whether the tariffs would apply to Mexico and Canada also, he said the levies would cover “everybody”. He however did not say when the tariffs would come into effect.

For its aluminium imports, the US primarily depends on Canada, China, and the United Arab Emirates. Its steel imports are not as high, but are important for sectors like oil drillers and wind energy developers reliant on specialty grades that are not produced in the US.

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The US steel industry is trying to recover from a difficult year, and some in the industry have complained that an increase in imports has hurt their revenues and profits.

India may not be impacted badly, though it does export articles of iron or steel to the US.

Japan’s bid to buy US Steel stalled

The announcement about steel tariffs come during a time when Japan’s Nippon Steel Corp bid to purchase US Steel Corp for $14.1 billion has been stalled, first by President Joe Biden and now by President Trump.

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After a meeting between Trump and Japanese Prime Minister Shigeru Ishiba, it appears that Nippon Steel in now thinking of investing in US Steel instead of buying the company outright. Trump told reporters that the Japanese company cannot have a majority stake in US Steel.

Reciprocal tariffs

Trump also reaffirmed 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 per cent and we're charging them nothing, it's not going to stay that way,” he told reporters.

“The ones that are taking advantage of the United States, we’re going to have reciprocal tariffs. It’ll be great for everybody, including other countries,” said Trump.

Also Read: Trump agrees to pause tariffs on Canada, Mexico as they vow to boost border security

Tariffs are a major part of Trump’s economic plans for the US. He views them as a means to grow the US economy, protect jobs, reduce trade deficits, and raise tax revenues.

However, economists say the tariffs will raise production cost for US manufacturers who import goods, leading to increased prices for consumers, reduce trade flows, and may result in lower tax revenues for the US.

(With agency inputs)