Move to double tariffs rattles global markets as White House eyes ‘industry security’
The U.S. is bracing for a new wave of trade tension as President Donald Trump announced plans to double tariffs on nearly all foreign steel and aluminium imports starting Wednesday midnight. The decision will send tariff rates soaring to 50%, setting off alarm bells from Detroit to New Delhi.
The new hike targets a vast range of industrial goods and everyday consumer products—from refrigerators and vehicles to soup cans and staples like foil and nails. Already taxed at 25%, these materials are essential across sectors. Doubling the duty is expected to make things more expensive across the board—both for businesses and, inevitably, for consumers.
Trump’s Pitch: “Protecting American Steel”
Trump isn’t mincing words. He says this is about jobs and security. Speaking in Pittsburgh last Friday, he stood before cheering steelworkers and promised the increase would “further secure the steel industry in the US.”
This isn’t new turf for him. He’s long favored using tariffs to shield domestic manufacturing from foreign competition, especially from China. The original 25% steel and aluminium tariffs were introduced in 2018 under Section 232 of the Trade Expansion Act, citing national security concerns.
The latest escalation, though, is bolder—and riskier. The administration says it’s justified by “global overcapacity” and the need to strengthen American production in critical sectors. But it’s also arriving in the middle of a hot election year.
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Industry’s Alarm Bells Are Ringing
Reaction from business groups was swift—and sharp. Industry leaders say the price shock could ripple across supply chains.
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In a statement, the American Automotive Policy Council said the move would “make American-made cars more expensive” and hurt job creation. Homebuilders also chimed in, warning of increased costs for nails, rebar, and structural frames.
Here’s where it really hits:
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Car prices could see a jump of $800–$1,200 per vehicle.
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Housing construction costs may climb by up to 5%.
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Small manufacturers say they’ll have to pass the burden to consumers.
Steel and aluminium aren’t just raw materials—they’re everywhere. They make up the frame of your car, the siding of your house, and even your morning soda can.
No one’s immune from the trickle-down.
India and Allies on Edge
India, one of the largest suppliers of steel and aluminium to the U.S., isn’t staying quiet. Trade officials in New Delhi warned the World Trade Organization that retaliatory duties might be in the pipeline.
That could make things messy. India had only just rolled back its own retaliatory tariffs after the 2018 standoff with the U.S. over similar metals duties. A fresh trade scuffle would sour progress made in recent bilateral ties.
Steel exports to the U.S. make up a small but valuable piece of India’s industrial trade. Analysts say sectors like rolled steel, ferro-alloys, and primary aluminium could be hit the hardest. One estimate by the Federation of Indian Export Organisations suggests a loss of over $400 million annually if the tariffs persist.
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UK Gets a Pass—for Now
Notably, one U.S. ally is dodging the tariff hammer—for now. Steel and aluminium from the United Kingdom will remain taxed at 25%, thanks to a post-Brexit trade understanding that the Biden administration had initially honored—and Trump now continues.
It’s a curious carve-out, and some analysts see it as politically strategic. By shielding the UK, Washington maintains favor with London while still sending a hard message to larger exporters like China, South Korea, and India.
But this raises eyebrows elsewhere.
In Europe, trade officials worry the selective approach could fuel a fracturing of global trade norms. There’s growing concern that more countries will soon seek exemptions or strike last-minute deals to avoid getting burned.
Trade Tensions Resurfacing
While Trump’s base may see the tariff hike as tough economic leadership, others say it’s a gamble. With global inflation still lurking and supply chains adjusting to post-pandemic realignments, this move adds volatility.
Here’s a quick look at the tariff timeline so far:
| Year | Tariff Event | Steel Tariff | Aluminium Tariff |
|---|---|---|---|
| 2018 | First Trump tariff wave | 25% | 10% |
| 2020 | Added quotas, minor relaxations | 25% | 10% |
| Mar 2025 | Raised aluminium to match steel | 25% | 25% |
| Jun 2025 | Trump hikes both again | 50% | 50% |
Three more sentences here to break the pattern. Economists at Brookings Institution say the hike could shave 0.2% off GDP over the next 12 months. That may sound small, but it adds up in fragile sectors. Some even warn of potential inflation spikes, especially in housing and consumer goods.
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What’s Next?
That’s the billion-dollar question. With the 2024 election in the rear-view and Trump back in office, aggressive trade moves are back on the table. The steel hike is likely just the start.
Some insiders believe Trump may target semiconductors or rare earth metals next—especially those sourced from East Asia. He’s floated the idea of a “unified American supply chain” that excludes China entirely.
Others are watching how China, the EU, and India respond. While the WTO remains the formal channel, recent years have shown that tit-for-tat tariffs often bypass Geneva altogether.
Markets, meanwhile, are jittery. U.S. steel stocks jumped slightly on the news, but automakers and retailers saw sharp drops. The S&P Metals & Mining Index ended Tuesday down 1.8%.
