U.S. Tariffs on Steel and Aluminum Imports In Effect March 12, 2025

Trade Update • Feb 11, 2025

n February 10, 2025, President Donald Trump signed an executive order imposing a 25% tariff on all steel and aluminum imports into the United States, effective March 12, 2025. This move eliminates all previous country exemptions, reinstating and expanding tariffs initially introduced in 2018. The policy affects key trading partners, including Canada, Mexico, Japan, South Korea, and the European Union.

The decision aims to address national security concerns, boost domestic steel and aluminum production, and prevent tariff evasion through alternative trade agreements. However, it also presents significant challenges for businesses that rely on these imports.

Updated Guidance on U.S. Import Duties for Steel, Aluminum, and Derivative Products.

Key Updates

Tariff Expansion: A 25% tariff will apply to all steel and aluminum imports, removing previous exemptions.

Elimination of Exemptions: Countries previously granted waivers or alternative agreements—including Canada, Mexico, Japan, South Korea, and the EU—will now face the full tariff.

Broader Coverage: The tariffs now extend beyond raw materials to include downstream products such as fabricated structural steel.

“Melted and Poured” Rule: Stricter regulations require imported steel and aluminum to be fully processed in the originating country, preventing transshipment via third-party nations.

Implications for Importers

Rising Costs: The tariffs will increase raw material costs for U.S. manufacturers, impacting industries such as automotive, construction, and packaging.

Supply Chain Disruptions: Canadian and Mexican suppliers, among others, must reassess pricing, logistics, and market strategies to mitigate tariff effects.

Compliance Requirements: Businesses must adhere to new documentation standards proving that metals are processed in their country of origin.

Potential Retaliation: Canada, Mexico, and the EU may impose countermeasures, potentially escalating trade tensions.

Background & Policy Justifications

The U.S. Department of Commerce cites the following reasons for the tariff reinstatement:

Increasing Steel Imports: Since Canada and Mexico were excluded from previous tariffs, steel imports rose by 18%.

China’s Role: Chinese steel exports surged to 114 million metric tons, displacing production in other countries and indirectly increasing imports into the U.S.

Global Overcapacity: The OECD projects global steel overcapacity to reach 630 million metric tons by 2026, surpassing production in all OECD nations.

National Security Concerns: The U.S. aims to maintain a steel capacity utilization rate above 80% to safeguard domestic production.

Review the Fact Sheet: President Donald J. Trump Restores Section 232 Tariffs

Government and Industry Response

Canadian Government: Prime Minister Justin Trudeau called the tariffs “unjustified” and is exploring diplomatic and retaliatory measures.

U.S. Steel Industry: Domestic producers support the move, citing protection against unfair competition from subsidized foreign steel.

Business Leaders & Unions: The United Steelworkers Union and the Canadian Steel Producers Association have expressed concerns over job losses and economic disruptions.

Strategies for Businesses

1. Compliance Adjustments

• Verify correct Harmonized Tariff Schedule (HTS) classification to confirm tariff applicability.
• Explore duty drawback and exemption programs where eligible.

2. Supply Chain Diversification

• Identify alternative suppliers from non-tariffed markets.
• Consider domestic production options to reduce dependency on U.S. exports.

3. Trade Agreement Opportunities

• Assess whether USMCA (formerly NAFTA) provides relief or exemptions.
• Explore alternative free trade agreements (FTAs) for tariff reductions.

4. Cost Mitigation Strategies

• Renegotiate supplier contracts to offset cost increases.
• Evaluate price adjustments or cost-sharing strategies with customers.

How GHY Can Help

The re-imposition of tariffs on Canadian steel and aluminum underscores the volatility of international trade. Businesses must remain agile, leverage expert guidance, and proactively explore solutions to navigate this evolving landscape. GHY stand ready to assist in navigating these turbulent waters, ensuring that Canadian businesses can continue to operate efficiently despite these new barriers.

For tailored customs solutions and strategic guidance, reach out to our team today.

Contact Us Today! gts@ghy.com, or call +1 (800) 667-0771.