US steel tariffs: What we know, what’s at stake, and why it matters

It’s hard to deny that the US is embroiled in several concurrent trade wars in steel. There are at least five separate tariffs directly or indirectly affecting steel in various nebulous states in the US. 

Key points on understanding the impact of steel tariffs on market dynamics

• The starkest are renewed Section 232 steel and aluminium tariffs of 25%, which took effect March 12.

• Additional 25% tariffs on Canada and Mexico tied to an alleged fentanyl and immigrant border crisis on various goods, delayed until April 2 while the Trump administration renegotiates the US-Mexico-Canada Agreement (USMCA), which it negotiated during President Donald Trump’s first term.

• Additional 20% on various Chinese goods in addition to existing duties.

• “Reciprocal” tariffs on a wide range of goods and countries, slated for April 2.

• Threatened 25% tariffs on automotives, computer chips, and more.

And all this does not include the threatened extra 25% tariff on Canadian goods in retaliation for a 25% tariff on electricity that Canada imposed on the US. Both of those tariff threats vanished hours after they were made, while USMCA negotiations are ongoing. 

It is unclear at this time to many market participants whether the tariffs will stack, exactly what goods will be subject to the broader tariffs and what policy goals — if any — would result in ending the tariffs. 

Five major reactions from the US steel market amid the trade war

• “I don’t know what’s going to happen. I don’t know what’s happening right now. We will have to wait to see what will happen.”  – Great Lakes-region service center source.

• “I wish [Trump] would stop being so indecisive over it. If he’s going to put them into place, then put them into place, as opposed to pushing it back.” – Distributor source.

• “This year is completely different [than last year]. This new [Section 232 tariffs] might make the playing field the same for everybody, so business has been so good so far. We’re hoping this will remain this way for a long time.” – Trader source.

• “I think the tariffs will continue to cause consumers to ‘panic’ buy, though I don’t know how much longer that will stick without the demand.” – Second distributor source 

• “I think that when all the smoke clears, we will have a new agreement and there will be higher tariffs on Canadian and Mexican goods. The real question is this — which of these countries can survive without the others, economically?” – Third distributor source. 

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