President Donald Trump set a 25% tax on all steel and aluminum coming into the US. This is a big change in trade rules. Canada, the top supplier of these metals, may suffer the most.
Tariffs Aim to Help US Metal Makers
The new tax will raise import costs. Leaders from Canada and other countries warned against it. Canada supplies more than half of US aluminum and is a top steel source.
US businesses worry about higher costs. But Trump says the plan will help American factories. “This is a big step to make America rich again,” he said. The tax starts on March 12, with no exceptions. When asked if prices would rise, Trump said, “In the end, it will cost less.”
He also hinted at new tariffs on medicines and computer chips. “This is only the beginning,” he added.
Canada Responds as Markets React
The US imports more steel than any other country. Its top suppliers are Canada, Brazil, and Mexico.
Canada’s Innovation Minister, Francois-Philippe Champagne, called the tariffs “unfair.” He said Canada’s metals are key to US industries, like defense and car making.
A Canadian steel group urged quick action. MP Kody Blois said Canada should trade less with the US. “This hurts a strong partnership,” he told the BBC.
US steel company stocks jumped. Cleveland-Cliffs rose almost 20%. Metal prices climbed, but Canada’s dollar and Mexico’s peso fell. The market response was mixed. Some doubt Trump will keep the tariffs in place.
Is This a Trade Tactic or a Long-Term Plan?
“This feels like 2018 all over again,” said Douglas Irwin, an economics professor at Dartmouth College. That year, Trump set similar tariffs—25% on steel and 15% on aluminum. Later, he allowed some exceptions.
Last week, he set 25% duties on Canadian and Mexican metals but delayed them by 30 days. He also taxed Chinese goods by 10%. China hit back with its own tariffs.
Tariffs are taxes on imports. Some leaders fear they will make foreign goods too costly in the US. Trump says tariffs will save US jobs and boost the economy. But US metal buyers worry about higher costs.
During Trump’s first term, steel prices in the US rose by 2.4%. Aluminum prices went up by 1.6%. Many industries warned of harm, from builders to can-makers.
Stephen Moore, a Heritage Foundation fellow, doubts US tariffs will create jobs. He said Trump uses them more as a tool to win deals.
New Rules Target China and Russia
Trump also wants to stop countries from avoiding tariffs by using third-party nations. The new rules say steel must be “melted and poured” and aluminum must be “smelted and cast” in North America. Nick Iacovella, from the Coalition for a Prosperous America, backs the tariffs. He warned that Mexican steel imports are too high. He also says Canada trades more with the US than it should. “There are trade gaps with Canada that we must fix,” Iacovella said.
Trump’s trade rules are not always clear. But his message is.
“Canada and Mexico took advantage of US trade. Now, we fight back,” he said.