Trump's 25% tariffs on all steel and aluminum imports take effect

WASHINGTON - President Donald Trump officially imposed a 25% tariff on all steel and aluminum imports on Wednesday, promising that the taxes would help create U.S. factory jobs. 

Meanwhile, his various tariff threats have jolted the stock market and raised fears of an economic slowdown. Canada and the European Union also announced countermeasures in response. 

Here’s what to know:

Trump's 25% tariffs on all steel and aluminum imports

What we know:

Trump removed all exemptions from his 2018 tariffs on the metals, in addition to increasing the tariffs on aluminum from 10%. 

The top steel exporters to the U.S. are Canada, Mexico, Brazil, South Korea and Japan, with exports from Taiwan and Vietnam growing at a fast pace, according to the International Trade Administration. Imports from China, the world's largest steel producer, account for only a small fraction of what the U.S. buys. The majority of U.S. aluminum imports comes from Canada.

Dig deeper:

His moves, based on a February directive, are part of a broader effort to disrupt and transform global commerce. Trump told CEOs in the Business Roundtable on Tuesday that the tariffs were causing companies to invest in U.S. factories. The 8% drop in the S&P 500 stock index over the past month on fears of deteriorating growth appears unlikely to dissuade him, as Trump argued that higher tariff rates would be more effective at bringing back factories.

FILE - U.S. President Donald Trump speaks before signing executive orders in the Oval Office of the White House on March 6, 2025, in Washington, D.C. (Photo by Alex Wong/Getty Images)

What they're saying:

"The higher it goes, the more likely it is they’re going to build," Trump told the group of CEOs in the Business Roundtable. "The biggest win is if they move into our country and produce jobs. That’s a bigger win than the tariffs themselves, but the tariffs are going to be throwing off a lot of money to this country."

The other side:

While Trump's tariffs could help steel and aluminum plants in the United States, they could raise prices for the manufacturers that use the metals as raw materials. Moreover, economists have found that the gains to the steel and aluminum industries were more than offset by the cost they imposed on "downstream’’ manufacturers that use their products.

At these downstream companies, production fell by nearly $3.5 billion because of the tariffs in 2021, a loss that exceeded the $2.3 billion uptick in production that year by aluminum producers and steelmakers, the U.S. International Trade Commission found in 2023.

The backstory:

During Trump’s first term, he meaningfully increased tariffs – but the revenues collected by the federal government were too small to significantly increase overall inflationary pressures. Trump's 2018 tariffs on steel and aluminum were eroded by exemptions.

After Canada and Mexico agreed to his demand for a revamped North American trade deal in 2020, they avoided the import taxes on the metals. Other U.S. trading partners had import quotas supplant the tariffs. And the first Trump administration also allowed U.S. companies to request exemptions from the tariffs if, for instance, they couldn’t find the steel they needed from domestic producers.

What's next:

Trump has separate tariffs on Canada, Mexico and China, with plans to also tax imports from the European Union, Brazil and South Korea by charging "reciprocal" rates starting on April 2. 

Separately, Trump on Tuesday threatened to put tariffs of 50% on steel and aluminum from Canada, but he chose to stay with the 25% rate after the province of Ontario suspended plans to put a surcharge on electricity sold to Michigan, Minnesota and New York.

How are Canada, the EU and others responding?

What we know:

Canada, the largest foreign supplier of steel and aluminum to the United States, responded with its own countermeasures. It plans to impose retaliatory tariffs of Canadian $29.8 billion ($20.7 billion) in response to the U.S. taxes on the metals, a senior Canadian government official said Wednesday. The official wasn't authorized to speak before the announcement and spoke on the condition of anonymity.

The EU also announced its own countermeasures on Wednesday. European Commission President Ursula von der Leyen said that as the United States was "applying tariffs worth 28 billion dollars, we are responding with countermeasures worth 26 billion euros," or about $28 billion. Those measures, which cover not just steel and aluminum products, but also textiles, home appliances and agricultural goods, are due to take effect on April 1.