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Analysis Trump’s Metal Tariffs Intensify His Global Trade War The new duties add more pressure to U.S. businesses and consumers. By Keith Johnson , a reporter at Foreign Policy covering geoeconomics and energy. A general view of the exterior of the U.S. Steel Clairton coke plant, in Clairton, Pennsylvania. A general view of the exterior of the U.S. Steel Clairton coke plant, in Clairton, Pennsylvania, on March 20, 2024. Jeff Swensen/Getty Images My FP: Follow topics and authors to get straight to what you like. Exclusively for FP subscribers. Subscribe Now | Log In Economics United States China March 12, 2025, 3:50 PM Comment icon View Comments ( 1 ) U.S. President Donald Trump’s bigger and more expansive tariffs on steel and aluminum imports went into effect Wednesday, adding to the woes of U.S. businesses and consumers already struggling with rising prices for inputs and raw materials, falling consumer confidence, and signs of an incipient, self-inflicted recession . Trump’s Second Term Ongoing reports and analysis While the tariffs aren’t as draconian as those Trump threatened for a few hours on Tuesday, which caused U.S. stock markets to drop again, they were enough to intensify the global trade war that Trump has promised to accelerate even further. The tariffs target all imports of steel and aluminum—and products derived from both—with 25 percent import duties. And, in a shift from his first term, Trump has said he won’t make exceptions for any countries. U.S. President Donald Trump’s bigger and more expansive tariffs on steel and aluminum imports went into effect Wednesday, adding to the woes of U.S. businesses and consumers already struggling with rising prices for inputs and raw materials, falling consumer confidence, and signs of an incipient, self-inflicted recession . Trending Articles Rodrigo Duterte Will Face Justice. Will Anyone Else? A deadly war on drugs in the Philippines isn’t over. Powered By Advertisement Rodrigo Duterte Will Face Justice. Will Anyone Else? X Trump’s Second Term Ongoing reports and analysis While the tariffs aren’t as draconian as those Trump threatened for a few hours on Tuesday, which caused U.S. stock markets to drop again, they were enough to intensify the global trade war that Trump has promised to accelerate even further. The tariffs target all imports of steel and aluminum—and products derived from both—with 25 percent import duties. And, in a shift from his first term, Trump has said he won’t make exceptions for any countries. The European Union immediately announced a package of reprisal tariffs starting next month on 26 billion euros’ worth of U.S. exports, targeting, in particular, goods made in red states and districts, including motorcycles, agricultural products, alcohol, and clothing. Canada is responding with 25 percent tariffs on almost $30 billion in U.S. exports. Other countries affected by the hike in metals tariffs, including the United Kingdom and Australia , reacted with strong words but held their counterfire for the time being—though all are bracing for an even more sweeping round of U.S. tariffs on all countries early next month. The U.S. steel industry, for decades a darling of successive administrations and especially this one, cheered the no-exceptions tariff implementation this time around as a way to shore up an industry that still struggles with a flood of steel from overseas producers. But U.S. businesses that use steel and aluminum are less excited by moves that will lock in higher domestic prices for the metals as well as make much-needed imports more expensive. Big steel-consuming industries include automakers, machinery, the oil and gas sector, and construction. The United States imports around one-quarter of its steel (led by imports from Canada, Mexico, and Brazil) and about half of its aluminum (overwhelmingly from Canada). As has been true for decades, tariffs on steel in particular may save a few steel-producing jobs, but those will come at the expense of much bigger costs, including in jobs, in the rest of the economy. Dating back to the George W. Bush administration, economists found that steel tariffs ended up as net job-destroyers. Researchers found a similar experience with Trump’s first-term tariffs on steel and aluminum, when a slight uptick in jobs at steel mills was vastly offset by the loss of more than 75,000 manufacturing jobs in the rest of the economy. The trickle-down impacts of pricier steel and aluminum due to tariffs, which are meant to kick-start Trump’s vision of a manufacturing revival, just make it that much more difficult to bring back jobs to the factory floor. Alcoa, the big aluminum producer, warned that the tariffs could cost 100,000 U.S. jobs. For aluminum, the situation is even more dire, and not just because of the greater dependency on imports or the fact that the new tariffs target things that are made out of aluminum. U.S. aluminum prices are already the highest in the world. The additional costs will be passed down to consumers of the metal including automakers (new cars could cost a few thousand dollars more due to their reliance on both metals), and even cans for food and beverages. The Can Manufacturers Institute warned that the metals tariffs will have “serious impacts for the U.S. economy and domestic food security.” That is where the economic squeeze is likely to come, not with the end consumer, but through smaller profits for drinks companies and carmakers. ¨Beverage cans, and autos, those are the key industries” for aluminum consumption, said Ross Strachan, the lead aluminum analyst at CRU Group, a metals and mining intelligence company. “It is much more difficult to pass the price increases onto the consumer, and so their margins are likely to be squeezed.” (The Big Three automakers saw stock market declines on Wednesday.) And unlike what happened with steel, which in Trump’s first term did use the tariff shield to increase capacity and production a bit, aluminum production is unlikely to return in any meaningful way to the United States regardless of Trump’s tariffs. A tiny bit of idled production capacity could restart, Strachan said, but that would likely have happened anyway to meet rising demand for aluminum. But new primary production, which is at the lowest level in the United States in at least half a century, will be harder to spur even with the protective tariffs. The costliest part of aluminum smelting is electricity, and the United States is pricier than many countries, such as Canada, that can use cheaper hydroelectric or geothermal energy to power cheap smelters. The last new U.S. aluminum smelter was built more than four decades ago. Read More Argentina’s President Javier Milei, Uruguay’s President Luis Lacalle Pou, European Commission President Ursula von der Leyen, Brazil’s President Luiz Inacio Lula da Silva and Paraguay’s President Santiago Pena pose for the family picture of the LXV Mercosur Summit in Montevideo on December 6, 2024. Europe’s Economic Decoupling From America Is Underway Facing the threat of U.S. tariffs, the EU is looking for free trade elsewhere. Analysis | Anchal Vohra Workers from Chinese electric vehicle company NIO work on an automated production line at the company’s manufacturing hub in Hefei, China, on Jan. 17. China Leans Into Trade War Officials in Beijing might be prepared to fight to the end, but is the Chinese public? China Brief | James Palmer Canada’s Prime Minister Justin Trudeau speaks during a news conference about the US tariffs against Canada on March 4 on Parliament Hill in Ottawa. Trump Has Officially Launched His North American Trade War It remains unclear why upending the world’s most important trading relationships would be a good thing. Analysis | Keith Johnson The tariffs don’t “fundamentally change the biggest challenge for them, which is the power cost, and it gives no certainty around that cost, either,” Strachan said. “From the new-build perspective, tariffs are not the tool to bring that back.” One big U.S. aluminum producer plans to build a new smelter—it is doubtful it will ever actually be built, Strachan said—but that was due to Biden-era subsidies for greener aluminum production rather than stiffer tariffs. Sign up for Editors’ Picks A curated selection of FP’s must-read stories. Sign Up By submitting your email, you agree to the Privacy Policy and Terms of Use and to receive email correspondence from us. You may opt out at any time. Enter your email Sign Up ✓ Signed Up You’re on the list! More ways to stay updated on global news: FP Live Enter your email Sign Up ✓ Signed Up World Brief Enter your email Sign Up ✓ Signed Up China Brief Enter your email Sign Up ✓ Signed Up South Asia Brief Enter your email Sign Up ✓ Signed Up Situation Report Enter your email Sign Up ✓ Signed Up View All Newsletters Which is why even groups that are sympathetic to the idea of protection for some threatened industries, including steel, wish Trump’s tariff shield came with a more holistic plan to help the metals industry modernize and embrace more efficient, cleaner manufacturing processes rather than using protectionism to prolong the life of older, more inefficient assets. Steelmakers could invest more in cutting-edge processes to strip out the dirtiest parts of steel production by, for example, working on direct-iron reduction rather than using coke to melt pig iron, a costly and filthy process. “We empathize that tariffs can play a role in helping that transition, which will be cost-prohibitive in the beginning. There is a space for protection until the cost curve comes down, but we don’t know if tariffs alone can do that—or rather, if they will do the exact opposite,” said Yong Kwon, a senior policy advisor at the Sierra Club, the environmental group. He noted that Alexander Hamilton’s influential Report on the Subject of Manufactures planted the tariff bug in the nascent United States in the late 18th century—a bug that has proved remarkably resistant to eradication—but also advocated an active government industrial policy including grants, subsidies, and technology transfer, something that many administrations, especially Trump’s, have been allergic to. In any event, for all the pain in the stock market and probable downstream disruptions, this week’s tariffs on metals are really just the start of Trump’s trade wars , aside from the already-higher tariffs levied on China since the start of his second term. (The cumulative effect of all the different tariffs is already creating eye-watering bills for importers.) The on-again, off-again blanket tariffs on Canada and Mexico will, Trump vows , be on again next month, possibly at even higher levels. And on April 2, Trump has said he will implement his main tariff plan, a “ reciprocal ” tariff on every country in the world meant to redress what he sees as a global trading field skewed systematically against the United States. If lights are flashing red on the U.S. economy already, expect to see genuine alarm bells go off later this spring. This post is part of FP’s ongoing coverage of the Trump administration . Follow along here . Keith Johnson is a reporter at Foreign Policy covering geoeconomics and energy. X: @KFJ_FP Read More On Canada | China | Donald Trump | Economics | EU | Mexico | Trade Policy & Agreements | United States Join the Conversation Commenting on this and other recent articles is just one benefit of a Foreign Policy subscription. Already a subscriber? Log In . Subscribe Subscribe View 1 Comments Join the Conversation Join the conversation on this and other recent Foreign Policy articles when you subscribe now. Subscribe Subscribe Not your account? 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