New Tariffs Announced on Steel and Aluminum

The U.S. has announced new tariffs of 25% on all imported steel and aluminum, set to take effect on March 12, 2025. The measure eliminates prior exemptions for Canada, Mexico, the European Union, the United Kingdom, Japan, and other key trading partners. For business leaders, the immediate concern is the rising cost of raw materials and potential supply chain disruptions. The move is part of a broader effort to boost domestic manufacturing, but industries reliant on imported metals, including construction, automotive, and energy, are expected to face higher expenses. Economists estimate the tariffs will impact $50 billion worth of goods. To help clients, prospects, and others, Wilson Lewis has provided a summary of the key details below.

What Are the New Tariffs?

The newly announced tariffs impose a 25% duty on all steel and aluminum imports, regardless of the country of origin. This reverses previous agreements that had exempted several U.S. allies. The United States is one of the world’s largest importers of steel, with Canada, Mexico, and Brazil as top suppliers. Canada, which supplies more than half of U.S. aluminum imports, is expected to be particularly affected.

The administration has justified the tariffs as necessary to protect U.S. producers and reduce dependence on foreign metals. However, business leaders are concerned about rising costs, especially in sectors where domestic supply is insufficient to meet demand.

Tariffs are often framed as targeting foreign producers, but in practice, U.S. importers bear the immediate financial burden. Companies that purchase foreign products under new trade policies will pay the additional costs upfront, with many passing them along to consumers in the form of higher prices.

Additional Tariff Updates 

In addition to the steel and aluminum tariffs, the U.S. has implemented several other trade measures that need to considered:

China Tariffs — The U.S. imposed a 10% tariff on all Chinese imports effective February 10, 2025, affecting a wide range of sectors, including electronics, machinery, textiles, and industrial components. This move directly impacts U.S. companies that rely on Chinese manufacturing for essential parts and products. From semiconductors and electrical equipment to industrial machinery and raw materials, businesses are now facing higher input costs.

In response, China imposed 15% tariffs on U.S. coal and liquefied natural gas and 10% tariffs on crude oil, agricultural machinery, and large-engine vehicles. China also announced export restrictions on key metals, including rare earth elements used in critical industries such as technology, defense, and renewable energy. This is likely to put further strain on U.S. manufacturers reliant on these materials.  

Canada and Mexico — The U.S. announced 25% tariffs on all imports from Canada and Mexico, along with a 10% duty on Canadian energy products such as crude oil, natural gas, and refined petroleum. While the implementation has been delayed for 30 days following multiple rounds of negotiations, businesses remain in a state of uncertainty. Both Canada and Mexico have indicated they are prepared to respond with countermeasures targeting U.S. exports, including agricultural products, automotive parts, and industrial equipment, which could significantly impact U.S. companies reliant on cross-border trade.

EU and UK — The newly announced steel and aluminum tariffs have effectively revoked previous trade agreements with the European Union and the United Kingdom, both of which are key trading partners for U.S. businesses. European leaders have signaled that they are considering retaliatory tariffs on U.S. exports, though no formal measures have been announced yet. Industries most at risk include automotive, aerospace, and consumer goods, which rely heavily on transatlantic trade for components, materials, and finished products. Any countermeasures could result in increased costs, supply chain delays, and potential loss of market share for U.S. companies operating in or exporting to Europe.

Economic Impacts on U.S. Businesses

The new tariffs are expected to increase costs across multiple industries, adding pressure to manufacturers, construction firms, and automotive companies that rely on imported materials. Higher prices for raw materials could tighten profit margins, slow production, and force businesses to adjust pricing strategies.

The tariffs also come at a time of rising inflation, with consumer prices up 3% in January 2025 compared to the previous year. Historically, tariffs have led to price increases. During Trump’s first term, similar tariffs raised the average price of steel and aluminum in the U.S. by 2.4% and 1.6%, respectively, according to the U.S. International Trade Commission. 

Economists warn that higher input costs will likely be passed on to consumers, potentially driving up prices for vehicles, household appliances, and other goods. Meanwhile, exporters face additional risks, as trading partners like Canada, Mexico, China, and the EU consider retaliatory tariffs, which could affect U.S. market share abroad.

How Businesses Can Prepare

Business leaders can take several steps to mitigate the impact of the new tariffs:

• Assess current supply chains and diversity suppliers, and explore domestic options.
• Review contracts for price adjustment clauses and consider renegotiations where necessary.
• Implement cost-saving measures, such as inventory adjustments and operational efficiencies.
• Stay updated on trade policy developments and work with industry associations for advocacy.

Contact Us

These newly announced tariffs represent a significant challenge for U.S. businesses, requiring proactive supply chain management, cost assessments, and strategic planning to mitigate the financial impact. If you have questions about how to adapt to new trade policies or need assistance with another tax or accounting issue, Wilson Lewis can help. For additional information call 770-476-1004 or click here to contact us. We look forward to speaking with you soon.