Trump Raises Steel and Aluminum Tariffs to 25%: Impact on Global Trade and the Aluminum Industry, and Strategies for Response

On February 10, 2025, U.S. President Donald Trump signed an executive order imposing a 25% tariff on all imported steel and aluminum products, eliminating previous duty-free quotas and exemptions for major suppliers like Canada and Mexico. The policy will take effect on March 4, escalating trade tensions and prompting global market reactions.

Policy Background and Core Content

This move is an extension of Trump's trade protectionism. In 2018, the administration imposed 25% and 10% tariffs on steel and aluminum, respectively, citing "national security" and exempting some allies. The new policy now raises aluminum tariffs to 25% and introduces a "North American Melting and Casting Standard," requiring imported steel and aluminum to be processed in North America to restrict semi-finished products from countries like China.

Impact on Global Trade

• Strong Reactions from Trading Partners: Canada and Mexico, key suppliers, have voiced strong opposition. The EU also plans countermeasures. Canada's François-Philippe Champagne highlighted that Canadian steel and aluminum support U.S. defense and auto industries.

• Global Supply Chain Disruption: The policy may realign global supply chains, affecting China's re-export trade via countries like Vietnam and Mexico, and EU steel trade through Ukraine.

• Rising Safe-Haven Asset Demand: Increased trade uncertainty has driven investors toward safe-haven assets like gold and copper, with international gold prices hitting record highs and COMEX copper futures premiums soaring to $920 per ton.

Direct Impact on the Aluminum Industry

• Impact on Major Supplier Countries: Canada and Mexico supply 39.7% and 6.9% of U.S. aluminum imports, respectively. The new tariffs will significantly affect their exports.

• Challenges and Opportunities for Chinese Companies: Although China's direct aluminum exports to the U.S. are low (11%), re-exports via Mexico may be impacted. Chinese firms need to reassess export strategies and seek new markets.

• U.S. Domestic Industry Reaction: The American Iron and Steel Institute supports the policy, citing enhanced domestic competitiveness. However, economists warn that tariffs could raise U.S. manufacturing costs and fuel inflation.

Response Strategies and Future Outlook

• Diversified Market Layout: Companies should explore emerging markets like Southeast Asia and Africa to reduce U.S. market dependence.

• Technological Innovation: Enhance product value through innovation, such as developing high-performance aluminum alloys for high-end manufacturing.

• Policy Monitoring: Firms must closely track U.S. and global trade policies to adjust strategies in advance, especially in anticipation of EU countermeasures.

Conclusion

Trump's steel and aluminum tariffs will significantly impact global trade and the aluminum industry. Companies must respond flexibly, leveraging diversified markets, technological innovation, and policy tracking to turn challenges into opportunities for sustainable development.