On Monday, Trump will announce a 25% tariff on steel and aluminum imports

On Monday, Trump will announce a 25% tariff on steel and aluminum imports

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On Sunday, February 9th, local time, US President Trump announced that he would impose a 25% tariff on steel and aluminum imports from all countries on Monday, February 10th. This decision marks a further escalation of trade tensions between the US and its major economic partners.

The background of Trump's tariff policy

Historical background: During his first term, Trump imposed a 25% tariff on steel and a 10% tariff on aluminum. However, he later granted duty-free quotas to some trading partners, including Canada, Mexico, and Brazil. These quotas were further expanded to the United Kingdom, Japan, and the European Union during former President Biden's term.

Reciprocal Tariff Plan: Trump stated that he would announce reciprocal tariff measures on Tuesday or Wednesday this week, with almost immediate effect. He claimed that the United States would match the tariff rates imposed by other countries, applying them to all nations.

Main trading partners and impacts

Canada, Brazil, and Mexico: According to data from the U.S. government and the American Iron and Steel Institute (AISI), these three countries are the top three sources of U.S. steel imports. Canada is the largest supplier of primary aluminum metal to the U.S., accounting for 79% of the total imports in the first 11 months of 2024. Mexico, on the other hand, is a major supplier of scrap aluminum and aluminum alloys.

EU: Trump has long complained about the EU's 10% tariff on imported cars, while the US imposes only a 2.5% tariff on EU cars. The US imposes a 25% tariff on imported pickup trucks, which are crucial to the US operations of Detroit automakers such as General Motors, Ford, and Stellantis.

International response

EU's response: In response to Trump's tariff threats, the EU is considering reducing import tariffs on American cars to avoid a trade conflict. Maros Sefcovic, the Executive Vice-President of the European Commission, stated that if negotiations fail, the EU will use its Anti-Coercive Instrument (ACI) to retaliate.

China's countermeasures: As a countermeasure to the previous actions of the Trump administration, the Ministry of Finance of China announced on February 10, 2025, that it would impose a 10% tariff on some imported goods originating from the United States, including crude oil, agricultural machinery, high-capacity vehicles, and pickup trucks.

Trump announced a 25% tariff on steel and aluminum imports from all countries, aiming to reshape the US's global trade relations. However, this move may trigger countermeasures from trading partners, exacerbate global economic tensions, and impact the international trade order. The international community needs to jointly respond, resolve differences through dialogue and cooperation, and uphold the free trade system. At the same time, all parties should strengthen communication and coordination, avoid escalating trade wars, and promote stability and prosperity of the global economy.