Deadline for preferred metals offers passes, leading to implementation of increased tariffs
Tariffs on Steel and Aluminum Skyrocket in U.S. as Global Trade War Heats Up
In a bold move by President Donald Trump, the tariff on most imported steel and aluminum will double starting this Wednesday, escalating the global trade war. This dramatic increase comes mere days before the June 3, 2025 deadline set for trading partners to deliver their "best offer" and avoid similar tariffs on various goods.
Last week, Trump announced the 50% increase, taking the tariffs that were initially set at 25% back in March, to the new level. During a steel industry conference in Washington, White House economic adviser Kevin Hassett explained, "We started at 25, then after studying the data more, realized that it was a big help, but more help is needed. So, that's why the 50 is starting tomorrow."
This surge in tariffs on Tuesday will kick off at 12:01 am GMT (4:01 am local time). The only exception will be for Britain, the sole country thus far to have secured a preliminary trade agreement with the U.S. during a 90-day respite on a broader range of tariffs. The current tariff for steel and aluminum imports from the UK will maintain a 25% rate until at least July 9, 2025.
More than 25% of all steel used in the U.S. is imported, with Canada and Mexico leading in steel exports, ranking No. 1 and 3, respectively. Canada, in particular, will face significant consequences, being the top exporter of aluminum to the U.S., exporting roughly twice the combined volumes of the top 10 other exporters. The U.S. currently sources about half of its aluminum from foreign sources.
In response, Canada's Prime Minister Mark Carney's office stated that negotiations to remove these and other tariffs were at an active stage.
Meanwhile, the sudden increase in levies has sent shockwaves through the markets, particularly for aluminum, where price premiums have more than doubled in 2025. With limited domestic production capabilities, it is likely that import volumes will remain stable unless the price hike discourages demand.
On the same Wednesday, partners are expected to submit their proposals to Secretary of Commerce Gina Raimondo in hopes of avoiding the "Liberation Day" tariffs, set to take effect in early July, 2025 [5]. Trading partners have been asked to provide tariff and quota offers for purchasing U.S. industrial and agricultural goods, plans to rectify any non-tariff barriers, commitments on digital trade and economic security, and country-specific commitments, among other requests [5]. The U.S. Trade Representative has promised to respond within days to each proposal submitted, offering an indication of the "landing zone" or the expected tariff rates for post-July 8, 2025 trade [5].
Despite having engaged in active dialogue with numerous countries since the tariffs were first announced, the U.S. has only secured a preliminary agreement with the UK thus far [5]. It is unclear whether other trade partners will be able to meet the deadline and secure satisfactory deals before the tariffs take effect later this summer.
The escalating U.S. tariffs on steel and aluminum, especially the upcoming 50% increase on imported steel and aluminum, is causing ripples in the global industrial finance landscape. This development is also stirring intense political negotiations, as trading partners race against time to submit their proposed deals to Secretary Raimondo, aiming to avoid the impending "Liberation Day" tariffs in early July, 2025.