President Donald Trump is expected to sign an executive order on tariffs today, according to a source familiar with the situation, in a move that could increase the risk of a multi-front trade war. Trump said on Sunday he would impose a 25 per cent tariff increase on all steel and aluminium imports into the US on top of existing duties and a further set of reciprocal tariffs later in the week, drawing warnings of retaliation from trade partners.
Details of the order Trump is due to sign were not immediately available.
Trump has also said he will impose broader reciprocal tariffs this week to match those of countries importing US goods. Shares in US steel and aluminium makers jumped, while shares in European and Asian steelmakers fell. The largest sources of US steel imports are Brazil, Canada and Mexico, followed by South Korea and Vietnam, according to government and industry data.
Canada, whose extensive hydropower resources aid its metal production, accounted for 79pc of US primary aluminium imports in the first 11 months of 2024.
US trade partners warned the new barriers would hurt US automakers, shipbuilders and other industries. “Australian steel and aluminium are creating thousands of good-paying American jobs, and are key for our shared defence interests,” Australian Trade Minister Don Farrell said.
US distillers warned that the steel tariffs could prompt the EU to raise duties on American whiskey.
“A 50pc tariff on America’s native spirit will have a catastrophic outcome for the 3,000 small distilleries across the United States,” said Chris Swonger, CEO of the Distilled Spirits Council of the United States.
The European Commission said it saw no justification for the tariffs and said President Ursula von der Leyen would meet US Vice President JD Vance in Paris today during an AI summit. In South Korea, the Industry Ministry called in steelmakers to discuss how to minimise the impact of tariffs.
During his first four-year term from 2017, Trump imposed tariffs of 25pc on steel and 10pc on aluminium.
But he later granted several countries exemptions, including Canada, Mexico and Australia, and struck duty-free quota deals for Brazil, South Korea and Argentina based on pre-tariff volumes. His successor Joe Biden later negotiated similar duty-free quotas for Britain, Japan and the EU. US steel mill capacity usage jumped above 80pc in 2019 after Trump’s initial tariffs, but has since fallen as China’s global dominance – unaffected by its exclusion by tariffs from the US market – has pushed down prices. One aluminum smelter in Missouri that had been revived by those tariffs was idled last year by Magnitude 7 Metals.
Kevin Dempsey, head of the American Iron and Steel Institute, said the trade group would work with Trump to address ‘foreign market-distorting policies’.
The United States is the second largest importer of steel worldwide, according to US International Trade Administration data, having imported more than 25 million metric tonnes of steel in 2023. More than half came from three countries: Canada, which accounts for one-quarter of US imports, Brazil and Mexico.
Trump also has promised detailed information today or tomorrow on his reciprocal tariff plan.
The president has long complained about the EU’s 10pc tariff on auto imports, much higher than the US car rate of 2.5pc. However, the US applies a 25pc tariff on pickup trucks, a vital source of profit for Detroit automakers like General Motors. Overall, the US trade-weighted average tariff rate is about 2.2pc, according to World Trade Organisation data, compared to 12pc for India, 6.7pc for Brazil, 5.1pc for Vietnam and 2.7pc for the EU.
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