Trump doubles US steel and aluminium tariffs to 50%; UK temporarily spared amid wider trade war

US President Donald Trump has signed an executive order doubling import tariffs on steel and aluminium from 25 to 50 per cent, a move that has sparked fresh concerns of a global trade flare-up.

The decision, effective from June 5, has exempted the United Kingdom for now, thanks to an ongoing bilateral agreement, but other trading partners, including Canada, Mexico and the European Union, are preparing countermeasures.

US metals tariffs hiked to 50 per cent

Trump’s new order raises the stakes in an already tense global trade environment. In a proclamation signed late Tuesday, he authorised a 50 per cent duty on most imported steel and aluminium, citing the need to bolster domestic industry. “Nobody’s going to be able to steal your industry… at 50 per cent, they can no longer get over the fence,” Trump said during a rally at a US Steel plant, as quoted by Reuters.

The hike marks the second major tariff escalation since March, when Trump first reimposed 25 per cent tariffs on steel and 10 per cent on aluminium, using Section 232 of the Trade Expansion Act, a clause that allows tariffs in the name of national security. “We started at 25 and then, after studying the data more, realised more help is needed,” said White House economic adviser Kevin Hassett at a steel conference in Washington, according to Reuters.

UK temporarily escapes the tariff blow for now

The United Kingdom has been spared, for now. Under a preliminary trade understanding known as the Economic Prosperity Deal (EPD), signed on May 8, UK metal exports will continue to face the original 25 per cent tariff, not the new 50 per cent rate. The deal is yet to be fully ratified in Parliament, and the exemption remains conditional.

In the order, Trump said the UK deserved “different treatment” due to the EPD but warned that the 50 per cent tariff could still be applied on or after July 9 if the agreement does not fully materialise. Trade Secretary Jonathan Reynolds, who met US Trade Representative Jamieson Greer in Paris, welcomed the temporary relief and reaffirmed the UK’s commitment to implementing the agreement.

Gareth Stace, Director General of UK Steel, said the exemption was “a welcome pause,” but warned of uncertainty. “The introduction of 50 per cent tariffs immediately puts the shutters up… most of our orders, if not all of them, will now be cancelled,” he told Reuters.

Tariffs take effect as deadline for new trade offers looms

The tariff spike also coincides with a broader Trump deadline; June 5 marks the date by which trading partners were expected to submit their “best offers” to avoid additional tariffs, part of Trump’s so-called “Liberation Day” duties set to kick in from July 8.

As reported by Reuters, the Office of the US Trade Representative (USTR) recently sent letters to multiple governments asking for detailed proposals, including commitments on reducing tariffs, addressing non-tariff barriers, and purchasing more US goods. White House spokeswoman Karoline Leavitt confirmed that the letters were intended as a “friendly reminder.”

So far, only the UK has struck a deal in principle. Other major trading partners, including Canada and Mexico, have warned of retaliation. “It makes no sense for the United States to levy a tariff on a product in which you have a surplus,” Mexico’s Economy Minister Marcelo Ebrard told Reuters, noting that Mexico imports more steel from the US than it exports there.

Global steel and aluminium trade reels under pressure

The global steel and aluminium sectors are already seeing ripple effects. US steel imports fell 17 per cent in April compared to March, according to data from the American Iron and Steel Institute (AISI). Census Bureau data cited by Bloomberg shows that Canada and Mexico,the first and third largest exporters of steel to the US, will be hit hardest.

Canada also faces steep exposure on the aluminium front, as it supplies nearly half of US aluminium imports, more than twice that of the next ten countries combined, according to official US trade data reviewed by Reuters.

Domestic price shocks have followed. Aluminium premiums in the US have more than doubled since the start of the year, with Bloomberg reporting a surge in market volatility due to the abrupt policy shift.

Business leaders have raised alarms. Chad Bartusek, Director of Supply Chain at Illinois-based Drill Rod & Tool Steels, told Reuters that he woke up to a 50 per cent tariff bill of $145,000, double what he expected. “It’s one punch after another,” he said, adding that his firm has had to raise prices by up to 14 per cent and reduce workers’ hours.

Economists, too, remain sceptical. Erica York, Vice President of Federal Tax Policy at the Tax Foundation, warned of broader fallout. “It’s just very foolish to double down on this type of tariff,” she told Reuters. York pointed to a 2020 analysis showing that Trump’s earlier tariffs created about 1,000 steel jobs but cost the economy 75,000 jobs in downstream industries.

What lies ahead?

As Trump’s trade deadline looms, the global metals market waits in limbo. While the UK has secured a temporary reprieve, much of the world, including close allies, continues to face stiff levies. Whether these measures ultimately protect American industry or deepen global economic fragmentation remains to be seen.

For now, businesses, trade diplomats and economists alike are bracing for the next round of negotiations or the next wave of tariffs.