U.S. President Donald Trump has enacted a sweeping order doubling tariffs on imported steel and aluminium from 25% to 50%, a move he says is aimed at securing the future of America’s steel industry but one that has triggered alarm across the global trade landscape.
The new tariffs, which came into effect on Wednesday, mark the second major increase since March and target key industrial inputs used in automobiles, construction, packaging, and manufacturing. The Trump administration has framed the action as essential to restoring domestic production capacity and protecting industries deemed vital to national security.
“Tariffs at 50% mean nobody’s going to be able to steal your industry,” Trump said during a rally at a U.S. Steel facility. “At 25%, they can get over that fence. At 50%, they can no longer get over the fence.”
Despite the administration’s rhetoric, critics warn that the steep tariff hike could backfire — driving up costs for American manufacturers, straining relationships with trade partners, and risking retaliatory measures. The U.S. is the world’s second-largest importer of steel after the European Union, sourcing primarily from countries like Canada, Brazil, Mexico, and South Korea.
Business Shockwaves and Economic Fallout
For companies reliant on imported steel and aluminium, the announcement came as a jolt. Rick Huether, CEO of Maryland-based Independent Can Co., which uses European steel to manufacture decorative tins and packaging, described the move as “chaotic.”
“There’s a lot of uncertainty. We’ve already raised prices, and we’re afraid customers might switch to plastic or paper alternatives,” he said.
Chad Bartusek, head of supply chain at Illinois-based Drill Rod & Tool Steels, said his firm expected to pay $72,000 in duties for a shipment arriving this month. With the 50% tariff, that cost has ballooned to nearly $145,000. “I woke up Saturday morning, looked at the news, and my jaw dropped,” he said. His company, which imports specialty steel not produced in the U.S., has already reduced worker hours and raised prices by up to 14%.
According to the American Iron and Steel Institute, imports of raw steel had shown little change by May compared to the previous year. However, import volumes fell 17% in April after Trump’s initial tariff changes, and industry analysts anticipate deeper cuts following this latest hike.
International Response and Trade Tensions
While the U.K. secured a partial exemption—retaining the original 25% rate—other allies, including Canada and the European Union, are bracing for economic fallout. Gareth Stace, Director General of UK Steel, warned that the escalation could be “catastrophic” for British steel exporters, with the potential cancellation of most U.K. orders to the U.S.
“The introduction of 50% tariffs immediately puts the shutters up,” he said. “Most of our orders, if not all of them, will now be cancelled.”
The European Commission confirmed that it was in intense negotiations with the U.S. to de-escalate the dispute. Olof Gill, Commission spokesperson for economic security and trade, said the EU was “negotiating hard” for a favorable outcome but cautioned that “the latest tariff threat” could undo months of diplomatic progress.
Economic Impact and Expert Criticism
Economists have raised red flags over the long-term effects on the U.S. economy. A 2020 analysis showed that Trump’s initial metal tariffs added about 1,000 jobs in steel but cost roughly 75,000 jobs across other industries, such as manufacturing and construction.
Erica York of the Tax Foundation called the doubling of tariffs on intermediate goods “very foolish,” warning that the move would significantly raise production costs and lead to broader job losses.
“The evidence overwhelmingly shows that tariffs on inputs like steel and aluminium are more harmful than protective,” she said.
As trade talks continue and global markets react, businesses and policymakers alike are now watching closely to see whether this bold move by the Trump administration signals a negotiating tactic or a lasting shift in U.S. trade policy.
Written By Rodney Mbua
