Through a presidential proclamation, the Trump Administration on Feb. 10, 2025, announced the reinstatement of a 25 percent tariff on all steel imports and an increase in aluminum tariffs from 10 percent to 25 percent. The tariffs apply to goods entered into the U.S. for consumption or withdrawn from a warehouse for consumption on or after March 12, 2025. This expansion of Section 232 tariffs revokes previously negotiated country-specific exemptions and quota arrangements established under the original Section 232 tariffs in 2018. As a result, all previously exempted or quota-managed countries – including Australia, South Korea, Canada, Mexico, Brazil, Japan, the United Kingdom and the European Union – will now be subject to the full 25 percent tariff on their steel and aluminum exports to the U.S. The decision is expected to have far-reaching implications, not only for American manufacturers that rely on imported steel and aluminum but also for global trade relations.
The 2018 Section 232 tariffs on steel (25 percent) and aluminum (10 percent) were originally implemented under the first Trump Administration to address national security concerns related to global overcapacity, particularly the subsidized steel production in China. Section 232 of the Trade Expansion Act of 1962 allows the president to impose import restrictions based on an investigation and affirmative determination by the U.S. Department of Commerce that certain imports threaten to impair U.S. national security. The Section 232 investigations found that excessive imports had weakened the domestic steel and aluminum industries, reducing their ability to meet national defense and critical infrastructure needs. Additionally, the Commerce Department determined that global overcapacity, driven by foreign government subsidies and unfair trade practices, had led to declining production, plant closures and job losses in U.S. industry.
Product Exclusions. In addition to revoking general product exclusions for countries with alternative agreements or exclusions under the 2018 Section 232 tariffs, the proclamation eliminates and modifies the product exclusion process for steel and aluminum imports. It removes the Commerce Secretary's authority to grant relief for products deemed insufficiently available or lacking in satisfactory quality in the U.S. Effective immediately, the Commerce Secretary is barred from considering new product exclusion requests or renewing existing ones. Previously granted exclusions will remain valid only until their expiration dates or until the approved volume has been imported, whichever comes first.
The proclamation creates a narrow exclusion for derivative steel products processed in another country if they originate from steel articles that were melted and poured in the U.S. and for derivative aluminum products processed in another country if they originate from aluminum articles that were smelted and cast in the U.S.
Product Inclusions. Notably, the proclamation mandates that by May 11, 2025, the Commerce Secretary must establish a process allowing U.S. steel and aluminum producers, as well as industry associations representing them, to request the inclusion of additional derivative products under these tariffs. To qualify, petitioners must demonstrate that rising imports of these products pose a threat to U.S. national security. This provision offers U.S. steel and aluminum producers a direct avenue to engage with the Trump Administration, allowing them to seek expanded tariff protections on derivative products.
Bilateral Relationship with Mexico and Canada. The situation echoes tensions from 2018 when the U.S. imposed tariffs on steel and aluminum imports, prompting Mexico to retaliate with tariffs on select U.S. goods. During that dispute, Mexico suspended preferential tariff treatment for U.S. products and imposed tariffs ranging from 15 percent to 25 percent on an extended list of steel and aluminum Harmonized Tariff Schedule (HTS) Codes, among other nonrelated products including motorboats and agricultural goods. These retaliatory tariffs were officially published in the National Mexican Gazette and lasted until the original U.S. tariffs were lifted.
This time around, Mexico could impose equivalent tariffs on U.S. goods, especially targeting industries where the U.S. has substantial exports to Mexico, which could include agricultural products, automotive parts and machinery. The tariffs on steel and aluminum accelerate the concerns about a trade war between the United States-Mexico-Canada Act (USMCA) parties, and the historical context highlights the potential for significant trade disruptions and the ongoing volatility in U.S.-Mexico and U.S.-Canada trade and economic relations.
