![\"\"](\"https:\/\/northamericanmining.com\/wp-content\/uploads\/2025\/03\/AdobeStock_1174918110.png\")
<\/p>\n\n\n<\/p>\n\n\n
On Feb. 10, U.S. President Donald Trump signed an order to introduce 25% tariffs on steel and aluminum imports (effective March 4). This is in addition to the 10% tariff on imports from Mainland China, and will add about another 0.5 pp to the average effective tariff rate on U.S. imports, bringing it to about 5.0%, up from about 3.0% before.<\/p>\n\n\n\n
Steel and aluminium imports are not very large as a share of the total (just under about 2.0%), but they have wider implications as they signal the potential for a continued escalation in tariffs. However, the latest set of tariffs means that more tariff pressures are building for the U.S. economy, which means that any additional tariffs (such as blanket tariffs on Mexico and Canada) would lead to the average tariff rate rising above 10% in the U.S.<\/p>\n\n\n\n
The tariffs on steel and aluminium also pose more substantial downside risks to growth in Canada, given that the northern neighbor accounts for about 24% of all steel imports and 40% of all aluminium imports. Indeed, we see significant downside risks to our Canada growth forecast of 1.2% in 2025. These measures also have slight downside risks to Mexico and Brazil given that they export steel to the United States..<\/p>\n\n\n\n
In recent years, Republican policymakers have highlighted the importance of the U.S. steel industry in terms of national security and defence. This is because steel is a key component of military equipment, and many policymakers have become concerned about the decline in U.S. output could limit rearmament goals in the future.<\/p>\n\n\n\n
This is in part the reason why the acquisition of U.S. Steel by Nippon Steel was blocked. Indeed, Trump is hoping that the tariffs will create the incentive to produce more in the United States, boosting manufacturing output and jobs. BMI\u2019s commodities team argues that similar to 2018-2019, expect that these tariffs will help to boost domestic production of steel, but it will be more of a challenge to significantly increase output.<\/p>\n\n\n\n
The U.S. aluminium industry is not globally competitive given that costs are too high, driven by expensive electricity and strict environmental regulations. In addition, aluminium imports account for about 50% of total demand, which suggests that there could be significant pass-through effects from a 25% tariff.<\/p>\n\n\n\n
\u201cGiven Trump\u2019s comments in recent weeks, we expect more tariffs to be implemented on goods he previously identified including certain drugs, copper, computer chips and \u201cthings associated with chips,\u201d BMI stated. This means that economies like Chile, which accounts for about 6% of U.S. copper imports could get hit as well as major semiconductor exporters such as Taiwan, China, Vietnam, Thailand, Malaysia, Korea amongst others given that they account for more than 70% of all semiconductor and integrated circuits imports to the United States.<\/p>\n\n\n\n
For 40 years, BMI has provided investors, risk managers and strategists with actionable insights to help them succeed in markets where reliable information can be hard to find and difficult to interpret. This commentary is published by BMI \u2013 A Fitch Solutions Company, and is not a comment on Fitch Ratings\u2019 Credit Ratings. Any comments or data included in the report are solely derived from BMI and independent sources. Fitch Ratings analysts do not share data or information with BMI<\/em>.<\/p>\n","protected":false},"excerpt":{"rendered":" On Feb. 10, U.S. President Donald Trump signed an order to introduce 25% tariffs on steel and aluminum imports (effective March 4). This is in addition to the 10% tariff on imports from Mainland China, and will add about another 0.5 pp to the average effective tariff rate on U.S. imports, bringing it to about 5.0%, up from about 3.0%…<\/p>\n","protected":false},"author":1,"featured_media":9902,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_themeisle_gutenberg_block_has_review":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[196],"tags":[3716,3715,3717],"coauthors":[1644],"class_list":["post-9901","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-final-word","tag-aluminium-imports","tag-president-donald-trump","tag-u-s-steel"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t