President Donald Trump has once again turned to one of his favoured economic tools: tariffs. On Tuesday, he signed an order doubling the duties on imported steel and aluminium, from 25% to a striking 50%. Framing the move as essential to U.S. national security and the revival of domestic industry, Trump argues that the heightened tariffs will strengthen America’s production capacity and shield against “low-priced, excess steel and aluminium” flooding in from abroad.
Yet, the decision is not without consequence—or controversy. While some view it as a strong defense of American industry, others see it as an economic gamble that may drive up costs for consumers and invite retaliation from key allies.
The UK Carveout: Diplomacy or Deal?
Notably, one country was spared from the hike: the United Kingdom. Following a bilateral deal last month, the UK will continue to face a 25% tariff rather than the newly increased 50%. According to the order, this exemption is temporary and tied to ongoing negotiations set to conclude by July 9.
This carveout signals not only the importance of the UK as a trade and defense partner but also the White House’s strategic manoeuvring. Trump is clearly preserving leverage for a new agreement, while easing friction with a close ally. For Britain, still navigating the post-Brexit economic landscape, the reprieve is welcome, but fragile.
Industry Reaction: Mixed Signals
Reaction from American industry leaders has been cautious and divided. David McCall, international president of the United Steelworkers union, welcomed the protectionist stance but emphasized that tariffs alone won’t guarantee long-term sustainability. “We need broader reforms and true partnerships with allies like Canada,” he said.
Matt Meenan from the Aluminium Association echoed that sentiment. While he appreciated the renewed attention to domestic production, he warned that “predictable trade and tariff policy” is essential for long-term investment. Economists were more blunt, warning of ripple effects across sectors—from construction and manufacturing to groceries—where metal components play a pivotal role.
Steel prices in the U.S. have already climbed 16% this year, reaching $4,984 per metric ton in March. The gap between U.S. steel prices and those in China and Europe is widening, increasing costs for domestic industries reliant on imported materials. In short, American manufacturers may find themselves squeezed between higher input costs and global competition.
Global Fallout: Trade Retaliation on the Horizon?
Beyond the economic front, the move threatens to escalate global trade tensions. The European Union has so far paused retaliatory measures, but EU officials have made it clear that if negotiations with Washington falter, countermeasures will follow. Other countries affected by the 50% tariff hike—such as South Korea, Japan, and Brazil—are also assessing how to respond.
Trump, undeterred by diplomatic caution, announced the new tariffs during a speech at a U.S. Steel plant in Pennsylvania. There, he also endorsed Nippon Steel’s acquisition of the facility, an eyebrow-raising move considering his “America First” stance. While promising the plant would remain under American control, the juxtaposition of foreign ownership and tariff nationalism struck many as politically complicated.
Legal Shadows and Political Ambitions
Trump’s legal authority to impose such sweeping tariffs may face future challenges. A federal court recently struck down several of his emergency-based duties, though the current metals order remains untouched. Still, the decision comes at a moment when Trump is eager to demonstrate strength on trade amid his second term’s turbulence and a looming re-election battle.
As with many of his bold economic actions, the steel and aluminium tariff hike may offer political rewards—especially in industrial swing states—but its economic consequences are harder to predict. If history is any guide, increased tariffs often bring unintended costs, not just abroad but at home.
The gamble is clear: Trump is betting that steel votes will outweigh steel shocks. Whether American consumers, manufacturers, and global partners agree remains to be seen.