
Posted on June 4, 2025
In a move that may change international trade completely, the United States announced an abrupt increase in tariffs on steel and aluminium imports, which are now at a staggering 50% — doubled. This increasingly aggressive trade policy shift is primarily aimed at countering “unfair trade practices” as recently identified by the U.S. government, specifically targeting foreign countries (e.g. China) that are often accused of overproduction and dumping low- or no-cost metals into the market globally.
One justification for the increase was likely to “protect manufacturers” and create American jobs. Jeris Ward, a Department of Defense official, said: “Foreign producers, particularly state-sponsored foreign producers, have been putting cheap steel and aluminum into the US market, creating and unsustainable end industry… these manufacturers are abdicating market forces creating market instability.”
As discussed by the U.S. Under Section 232 of the Trade Expansion Act, the Department of Commerce can impose tariffs when imported goods are deemed a potential threat to national security. The rationale is that no economic and military infrastructure is strong without a supporting solid domestic metals industry.
Who’s Affected?
The new 50% tariff rate is expected to affect several stakeholders:
- Foreign exporters of steel and aluminum (China, Russia, or a traditional ally like South Korea or the EU, etc.) will likely see a reduction in access to the U.S. market.
- S. manufacturers that use imported metals, specifically in the automotive, construction, or home appliance areas, will likely see increases in their material costs yet may have to pass those costs along to consumers.
- American steel and aluminum producers may have less foreign competition with the domestic demand for their products increasing as a result.
Global Response & Trade Friction
Responses have been swift and mixed from around the world. Countries that oppose such a measure have indicated that they may retaliate with tariffs of their own or take their case to the World Trade Organization (WTO). Economists believe that the increase in protectionism could escalate trade tension and disrupt supply chains that were just beginning to stabilize after recovering from the impact of inflation and the uncertainties of the pandemic.
What is Next?
While this action may provide some short-term relief to U.S. metal producers, the long-term consequences are not clear. In particular, higher input costs could reverberate throughout the economy, and retaliation might hurt other U.S. exporters in sectors ultimately unrelated to metals, such as agriculture and technology.
Rather than unilateral tariff increases, trade experts suggest that international cooperation to resolve overcapacity and enforce the rules of fair trade may help to benefit industry without inciting a trade war.
Conclusion
Tripling the U.S. tariffs on steel and aluminum to 50% is an aggressive and provocative move to U.S. trade policy. Whether this policy strengthens domestic industry or incites international backlash will depend on the reaction of global partners and the resilience of U.S. supply chains when pressured.