President Donald Trump has ordered a 25% import tax on all steel and aluminium entering the US in a major expansion of existing trade barriers.
The tariffs, which will increase the costs of importing the metals into the US, come despite warnings of retaliation from some political leaders in Canada – America’s biggest supplier of the metals – as well as other countries.
US businesses dependent on the imports have also raised concerns, but Trump has said his plans will boost domestic production.
He warned there would be no exceptions, saying he was “simplifying” the rules, which are set to come into effect on 4 March.
“This is a big deal, the beginning of making America rich again,” Trump said.
“Our nation requires steel and aluminium to be made in America, not in foreign lands,” he added.
When asked if tariffs could increase prices for consumers, the US president responded: “Ultimately it will be cheaper.”
“It’s time for our great industries to come back to America…this is the first of many,” he added, suggesting other tariffs could focus on pharmaceuticals and computer chips.
The US is the world’s largest importer of steel, counting Canada, Brazil and Mexico as its top three suppliers.
Canada alone accounted for more than 50% of aluminium imported into the US last year. If the tariffs come into force, they are expected to have the most significant impact on Canada.
Late on Monday, Canada’s Minister of Innovation, Francois-Phillippe Champagne, said the tariffs were “totally unjustified”.
“Canadian steel and aluminium support key industries in the US from defence, shipbuilding, energy to automotive,” Champagne said. “This is making North America more competitive and secure.”
Ahead of the announcement, Ontario premier Doug Ford, whose province is home to much of Canada’s steel production, accused Trump of “shifting goalposts and constant chaos, putting our economy at risk”.
The lobby group for Canadian steel makers called on the Canadian government to retaliate against the US “immediately”, while Kody Blois, a leading MP from Canada’s governing Liberal Party, said his country was looking for ways to reduce its trade relationship with the US.
“This is completely upending what has been a very strong partnership,” he told BBC Newshour ahead of the official order.
Meanwhile, share prices of the major US steel-makers rose on Monday in anticipation of the order, with the price of Cleveland-Cliffs jumping nearly 20%. Prices for steel and aluminium also jumped.
The response in much of the rest of the market was muted, reflecting questions about how serious Trump is about his plans, given his track record of postponing tariffs, or negotiating exemptions to the rules.
In 2018, during his first term, Trump announced tariffs of 25% on steel and 15% on aluminium, but eventually negotiated carve-outs for many countries including Australia, Canada and Mexico
