Trump Signs off on Steel, Aluminum Tariffs; Canada, Mexico Excluded
US President Donald Trump on Thursday signed off on two proclamations instituting his administration's previously announced tariffs on steel and aluminum imports.
As a result, the US will implement a 25% tariff on imports of steel and a 10% tariff on imports of aluminum, which will take effect March 23, 15 days from the date of the signings. Canada and Mexico will be excluded from the initial tariffs, and the proclamations include a broader provision which will allow other countries to request an exemption, a senior administration official said Thursday in a media briefing ahead of the signing.
"[The tariffs] will cover all of the countries that ship us steel and aluminum products ... however, importantly for now, Canada and Mexico will be excluded from the tariffs and we will have ongoing discussions with Canada and Mexico about our security relationship," the administration official said. "NAFTA discussions will be part of that, only because NAFTA is an important part of the security relationship in the hemisphere."
No timeline was provided for when Canada and Mexico's exemptions may lapse.
"All countries will be welcome to discuss with the US alternative ways to address the threat and impairment of the national secretary caused by their imports," the administration official said.
Discussions with other countries regarding potential exemptions will take place with United States Trade Representative Robert Lighthizer, the administration official said. Should countries secure exemptions, the US will raise tariffs on everyone else modestly, he said.
"Should the president decide there is a satisfactory alternative means to address the threat ... this administration has the ability to flexibly modify the order in a way which will preserve our national security," he said.
The 10% and 25% blanket tariff levels have been set to ensure a healthy steel and aluminum industry that allows US producers to earn reasonable rates of return, the administration official said. In order to do that, steel and aluminum producers have to achieve a sufficient level of capacity utilization, he said. The administration has said its goal is to get steel and aluminum capacity utilization up to 80% each. The administration does not expect the tariffs to negatively impact downstream industries, either through rising prices or job loss, the official said.
Following a nine-month investigation into the effect of steel and aluminum imports on national security, the Department of Commerce delivered its Section 232 report and recommendations to Trump January 11 for steel and January 19 for aluminum. Both reports were made public February 16. A global tariff of at least 24% on all steel imports from all countries was one of three recommendations presented by Commerce in its report, however, the administration decided to impose a tariff of 25% on steel based on additional data and analysis by Commerce following delivery of the initial report, the administration official said. In a similar manner, Commerce recommended a 7.7% global tariff on aluminum imports as one of three options outlined in the report, but a 10% tariff was chosen instead.