President Donald Trump’s decision to impose sweeping 25% tariffs on all steel and aluminum imports into the U.S. has reignited global trade tensions and raised alarms across industries that rely on the metals.
The policy, announced March 12, marks Trump’s first application of such tariffs across all countries during his second term and is intended to boost domestic manufacturing. But industry leaders and international partners warn the move could inflict more harm than good on the U.S. economy.
Canada and the European Union responded swiftly, unveiling retaliatory tariffs on billions of dollars of American goods. Canada’s countermeasures include 25% duties on $20.1 billion USD in U.S. imports, including steel, aluminum and other consumer products. The EU followed with measures targeting up to $28 billion worth of American exports.
“We will continue to maintain our countermeasures and increase them on April 2,” Canadian Finance Minister Dominic LeBlanc said March 12. He is scheduled to meet with U.S. Commerce Secretary Howard Lutnick this week in Washington.
The policy reversal removes the exemptions that existed under the Biden administration for key allies like Canada, Mexico, Japan and South Korea. Trump had previously exempted some countries in his first term but now applies tariffs universally -- raising aluminum duties from 10% to 25% and enforcing the same rate for steel.
Industry stakeholders, including Alcoa, one of the largest U.S. aluminum producers, have voiced strong concerns. Alcoa CEO William Oplinger warned in February the tariffs could cost 100,000 U.S. jobs, including 20,000 in the aluminum industry alone.
“While we’re very supportive of their efforts to improve the industry as well as strengthen U.S. manufacturing jobs, we do see that there could be some harm from the tariffs,” said Alcoa CFO Molly Beerman at a JPMorgan industry conference. “We’re particularly focused on gaining a Canadian exemption.”
Much of Alcoa’s production is based in Canada due to energy cost advantages, making the tariffs especially disruptive for U.S.-based operations reliant on Canadian imports.
The broader implications extend beyond aluminum and steel producers. In 2023, the U.S. imported $31.3 billion worth of iron and steel and $27.4 billion of aluminum, with Canada being the top source for both metals. These materials are critical to a wide range of industries, from automotive to appliances, construction and infrastructure.
Phil Gibbs, an analyst at KeyBanc, noted that domestic steel prices have already surged more than 30% over the past two months, while aluminum prices have climbed about 15% -- costs that may soon be passed on to manufacturers and, ultimately, consumers.
Even as the administration targets foreign producers, major U.S. suppliers like Canada’s Algoma Steel are feeling the effects. Algoma announced it would suspend all shipments to the U.S., citing the uncertainty surrounding tariff policies. The company has already laid off 20 workers in response to the disruption.
Meanwhile, global leaders are voicing concern over the wider economic fallout. Australian Prime Minister Anthony Albanese called the tariffs “entirely unjustified” and warned of broader inflationary impacts. Mexico’s President Claudia Sheinbaum indicated her government would delay retaliatory measures until the U.S. provides further clarity on its next steps, expected by April 2.
Trump defended the move, suggesting the tariffs will encourage domestic production. “The higher it goes, the more likely it is they’re going to build,” he said during a Business Roundtable event on March 11.
Still, analysts caution that the strategy may have unintended consequences. A 2023 report by the International Trade Commission found that Trump’s earlier metals tariffs raised costs for manufacturers and reduced industry output by more than $3 billion in 2021.
