Trump to announce 25% tariffs on all steel, aluminum imports on Monday

“Any steel coming into the United States is going to have a 25% tariff. … Aluminum, too,” CNN quoted Trump as saying.

The president made the comments about tariffs while speaking to reporters on Sunday afternoon. He was boarding Air Force One to fly from Florida to New Orleans for the Super Bowl, Bloomberg reported.

The president also said he would announce reciprocal tariffs on countries that place duties on US exports. Trump said that announcement would come on Tuesday or Wednesday.

“Very simply, it’s if they charge us, we charge them,” Trump said, according to CNN.

Trump had previously raised the possibility of reciprocal tariffs during a press conference on Friday afternoon with Japanese Prime Minister Shigeru Ishiba.

Topalian’s crystal ball

Trump’s comments come after Nucor CEO Leon Topalian lamented during an earnings call in late January that Section 232 tariffs on steel had been weakened over time.

“Country exemptions and quota arrangements, including with Mexico and Canada and the EU, should be replaced with tariffs,” he said at the time. “And the Section 232 measures should be extended to downstream steel products such as fabricated structural steel.”

Topalian also said that the easing of Section 232 tariffs at the United States’ northern and southern borders had been “grossly abused.”

“Roughly 40% of the imports coming into America today are from Canada and Mexico,” he said. “That has got to come way down. I think in the coming hours and days, you’re going to see broad sweeping tariffs that are going to come back in to create a much more level playing field.”

Section 232 redux?

It was not immediately clear what mechanism Trump might use to impose the 25% steel and aluminum tariffs.

Trump in 2018 used Section 232 to declare a national security emergency and to impose tariffs of 25% on steel imports from most (but not all) countries and 10% tariffs on imported aluminum.

In the intervening years, various exceptions and exemptions have been made. Australia, for example, was not subject to Section 232. Tariffs were removed from Canada and Mexico in 2019 ahead of USMCA going into effect. And Brazil, South Korea, and Argentina agreed to absolute quotas – also known as hard quotas – in exchange for exemption from the tariffs.

In addition, former President Joe Biden negotiated tariff-rate quotas, or soft quotas, with the European Union, Japan, and the United Kingdom. Those went into effect in 2022.

What does it mean for steel prices?

“This week will be wise consumers waking up to price risk. They will come out to try and buy at last week’s prices with deals as long into the calendar as sellers will allow,” one industry veteran said.

“If the market really gains traction, the following week will be the rest of the consumers trying to jump in. The best buyers have already hedged,” he added.

The potential for such a dynamic had been in place for a while. And the chance of it happening have only gone up since Trump’s inauguration, he noted.