US president Donald Trump today imposed a 25pc tariff on all US imports of steel and aluminum effective 12 March, although he said he would consider making an exemption for imports from Australia.
In remarks to reporters at the White House Trump complained that many of the steel and aluminum tariffs he imposed since 2018 have been moderated or reduced for some countries. Currently Australia and Canada can export any steel and aluminum they want to into the US without tariffs, while Mexico can export steel melted and poured in the US-Mexico-Canada (USMCA) agreement region into the US without tariffs, while any material with an origin outside of USMCA is subject to 25pc tariffs.
"Our nation requires steel and aluminum to be made in America, not in foreign lands," Trump said. "It's 25pc without exceptions, and that's all countries, no matter where it comes from, all countries."
But Trump, prompted by reporters, confirmed that he may make an exemption for Australian-sourced steel, after Canberra threatened to take reciprocal measures.
"We have a surplus with Australia, one of the few," Trump said, referring to an overall trade surplus the US runs with Australia. "And the reason is they buy a lot of airplanes."
Trump said he spoke with Australian prime minister Anthony Albanese earlier today. "I told him that [steel tariff exemptions] is something that we will give great consideration."
A similar exemption for the UK is unlikely since the US already is running a trade deficit with that country, Trump said.
Trump contended that his initial volley of tariffs in 2018 led to the creation of hundreds of thousands of jobs in the US and boosted economic growth. A 2019 study from the Federal Reserve Board that was updated in 2024 estimates that taking into account retaliatory tariffs, there was a net decrease in US jobs and economic growth from the tariffs.
US oil and gas midstream companies were among the industries hit by the 2018 tariffs, which led to higher costs for pipeline steel.
Most steel imports from non-tariffed
US steel imports are heavily reliant on the countries that are currently not subject to US tariffs, with their volumes making up 80pc of the 26.2mn metric tonnes (t) of steel products imported in 2024, according to US Department of Commerce data.
Steel tariff rate quota (TRQ) systems are in place for Argentina, Brazil, the EU, Japan, South Korea and the UK for steel products, with specifics dependent on the country.
The CME Midwest hot-rolled coil (HRC) futures market jumped today, after Trump said on Sunday he would impose new tariffs, by $51/short ton (st) for March to $856/st, while April increased by $48/st to $858/st.
Steel costs would rise by $6.38bn based on the $25.5bn value of 2024 steel imports from those nontariffed countries, if volumes remained the same.
Those higher costs would lead to more US steel mill price increases, with one buyer expecting another round of price increases coming soon from US steelmakers. Steelmaker Nucor has increased its published hot-rolled coil (HRC) spot price by $40/short ton (st) in the last three weeks to $790/st. Other steelmakers like ArcelorMittal USA, Cleveland-Cliffs, and US Steel are at $800/st offers for their spot HRC.
Canada key aluminum supplier
In the aluminum market, the US imported over 6mn t of products in 2024, according to customs data.
Canadian aluminum exporters currently have no restrictions on their volumes into the US. They shipped the highest volumes into the US and are responsible for an even larger share of primary aluminum imports. Current US primary aluminum smelting capacity, excluding idled operations, is around 795,000t/yr, which equaled less than one-third of Canadian imports and one-fifth of total imports. There are multiple idled primary aluminum facilities and a greenfield plant currently under construction, but observers and company representatives challenged the feasibility of idled plant restarts in the past.
TRQ systems exist for US aluminum imports from Argentina, the EU, and the UK.
