US Steel and Aluminum Tariffs Doubled: Impact on Imports Unlikely in the Short Term

President Trump has signed a directive doubling steel and aluminum tariffs to 50%. Morgan Stanley Metals and Mining Commodities Strategist Amy Gower believes the higher tariff is unlikely to impact US imports in the short term.

President Donald Trump has signed a directive doubling steel and aluminum tariffs to 50%. The new tariffs, which went into effect on Wednesday, June 4, are set to have significant implications for the global steel industry and U.S. trade dynamics. According to Reuters, the tariffs will increase the cost of imported steel and aluminum, potentially affecting industries that rely on these materials [1].

The decision to raise the tariffs from 25% to 50% was announced during a speech at a steel mill in Pennsylvania. Trump cited the need to protect the U.S. steel industry and create jobs. "At 25 percent, they can kind of get over the fence. At 50 percent, they can't," Trump said, indicating his intention to make the tariffs more stringent [1].

The impact of the higher tariffs is expected to be felt globally, particularly in Sweden. Sweden's steel exports amount to approximately SEK 61 billion, with just under a tenth going to the U.S. According to Mathias Ternell, trade policy director at the steel industry's trade association Jernkontoret, the increased tariffs could force Swedish steel exporters to seek cheaper alternatives [1].

The EU has promised countermeasures against Trump's steel tariffs. If no mutually acceptable solution is reached, both existing and additional EU measures will automatically enter into force on July 14—or earlier if circumstances so require, according to an EU spokesperson [1].

The tariffs are also expected to have an impact on U.S. steel firms. U.S. steel and aluminum prices have jumped in response to the tariffs, with shares of U.S. steelmakers soaring across the board. While the tariffs could lead to job growth in the steel industry, experts warn that the broader cost to industries dependent on steel inputs could negate those gains [3].

Morgan Stanley Metals and Mining Commodities Strategist Amy Gower believes the higher tariff is unlikely to impact U.S. imports in the short term. The tariffs are expected to have a limited immediate impact due to the on-again, off-again nature of the tariffs and the time it takes to build new steel mills [3].

The new tariffs are part of a broader trade policy that includes tariffs on imported automobiles and auto parts. The tariffs are imposed under authorities not affected by recent court decisions that cast doubt on the president's powers to enact trade barriers [3].

References:
[1] https://www.marketscreener.com/quote/stock/SSAB-AB-6491386/news/Trump-doubles-steel-tariffs-to-50-percent-50125827/
[2] https://www.benzinga.com/markets/tech/25/06/45763363/nvidia-overtakes-microsoft-as-the-worlds-most-valuable-company-with-3-4-trillion-market-cap-as-morgan-stanley-reaffirms-top-pick-status
[3] https://www.nbcnews.com/business/business-news/trump-raises-tariffs-steel-50-percent-what-to-know-rcna210375