EU counters

Steel and aluminum tariffs come into force in the USA

The 25% tariffs on all steel and aluminum imports announced by US President Donald Trump have come into force.

(Bild: APA/AFP/SAUL LOEB)

The 25% special tariffs on steel and aluminum imports imposed by US President Donald Trump are now officially in force. What is explosive is that the previous exemptions for EU and other countries were also lifted by Trump's February order. The EU has already threatened to take countermeasures - a new trade conflict is looming.

Trump justifies the measure with the argument that excessive steel and aluminum imports would endanger the national security of the United States. He also accuses China of flooding the international market with cheap metals. Current figures show that around a quarter of the steel processed in the USA is imported. In the case of aluminum, the import share is even over 40 percent - and far higher for recycled secondary aluminum.

According to the American Iron and Steel Institute, most steel imports to the USA come from Canada, Brazil and Mexico. Germany and China are also among the top 10 supplier countries. Most aluminum is also sourced from Canada.

Dispute with Canada escalates
Canada has been hit particularly hard, having recently come under fierce verbal attack from Trump. Shortly before the new tariffs came into force, he announced additional levies on Canadian steel and aluminum imports. He doubled the previous tariff rate of 25 percent to 50 percent - in response to a 25 percent increase in electricity prices for US customers by the Canadian province of Ontario. However, after negotiations with US Trade Minister Howard Lutnick, Ontario suspended the electricity increase, whereupon the White House declared that the original 25 percent tariff for Canada would apply again.

Trump had already imposed general tariffs of 25 percent on imports from Canada and Mexico last week. However, he granted a short-term one-month reprieve for certain goods covered by the North American Free Trade Agreement (USMCA). Steel and aluminum could theoretically also fall under this agreement under certain conditions, but it remains unclear how this will be implemented in practice. According to the US media, there is great uncertainty among the companies affected.

The European Union is also being targeted
The EU must also expect the new tariffs to have a significant impact. According to current statistics, around ten percent of steel imports and 15 percent of aluminum imports in the USA come from European countries. The German Steel Federation emphasized that the USA is a key sales market for the European steel industry. The EU had already brought countermeasures into play in February in response to Trump's announcements.

A new trade war is on the horizon.

(Bild: AP)

The situation is very reminiscent of the trade disputes during Trump's first term in office. Back then, the EU responded to US tariffs with retaliatory measures on US products such as jeans, bourbon whiskey, motorcycles and peanut butter. Under Joe Biden's administration, a standstill agreement was concluded that mitigated the punitive tariffs - but this is now on the brink again.

Further tariffs against the EU in April
The punitive tariffs that have now come into force are just the beginning. On April 2, Trump wants to present his so-called reciprocal tariff plan. Tariffs are to be increased in all areas in which the USA currently charges less than its trading partners.

The Republican justifies the strategy by saying that he wants to balance out the trade imbalance. In particular, he accuses the EU of putting the United States at an economic disadvantage. According to the White House, further trade barriers could be targeted - including European VAT, state subsidies and regulations that make it difficult for US companies to enter the EU market.