Those familiar with trade wars know that one of the first targets is the steel industry. In March 2002, the United States, under the George W. Bush administration, adopted safeguard measures under Section 201 of the Trade Act of 1974. Duties were increased on a wide range of products, including flat steel, hot-rolled bar, cold-finished bar, rebar, certain welded tubular products, carbon and alloy fittings, among others. Shortly afterward, the EU imposed its own definitive safeguard measures against imports of certain steel products under Commission Regulation (EC) No. 1694/2002.
History, as it often does, repeated itself. About 15 years later, steel once again became the target of a trade war—this time initiated during President Donald Trump’s first term. In March 2018, Trump announced his intention to impose a 25% tariff on steel imports (with exceptions for select countries) and a 10% tariff on aluminum imports. These tariffs were justified under Section 232 of the Trade Expansion Act, which grants the President broad authority to adjust imports—including through tariffs—if excessive imports are deemed a threat to national security.
The selection of steel and aluminum is far from arbitrary. Steel is one of the most widely used materials in the world. It is essential to real estate, shipping, rail, infrastructure, machinery, electrical appliances, and, crucially, the defense sector. Its strategic importance is such that a shortage could compromise a nation’s security.
It is also no secret that China dominates global steel production, accounting for over half the world’s total—1,173 billion tonnes in 2023—despite relatively stable domestic demand. According to OECD estimates, China’s steel subsidies are more than five times higher than those of other non-OECD economies and over ten times higher than OECD economies. The problem of Chinese overcapacity remains persistent.
Now, in his second term, President Trump is doubling down. As of March 12, 2025, the U.S. has reimposed 25% tariffs on imports of steel and aluminum.
These renewed tariffs reflect a more aggressive trade posture:
- They eliminate exemptions previously granted to allies such as Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the United Kingdom.
- The tariff on aluminum has been raised from 10% to 25%.
- The measures now extend to a wider range of derivative products. A list released on February 14, 2025, includes items such as steel and aluminum furniture, stoves, barbecues, cookware, and gym equipment.
It seems the U.S. has yet to fully internalize the potential blowback of these policies. While the 2018 tariffs modestly expanded U.S. metal production, they also increased the cost of cars, tools, and machinery by over $3 billion in 2021, according to a 2023 report by the U.S. International Trade Commission.
Further intensifying this new round of trade restrictions, the U.S. has opened a fresh Section 232 investigation—this time on imports of timber, lumber, and related derivative products. If adopted, the new tariffs could significantly raise costs in the homebuilding and remodeling sectors. Not ideal timing for prospective homeowners. The main exporters of lumber and wood products to the U.S. are Canada, China, Brazil, Mexico, and Chile. A public comment period, which is essential for securing exclusions, is open until April 1, 2025.
On its side, the EU has declared it will not reinstate the countermeasures originally introduced in response to the 2017 U.S. steel tariffs (which famously targeted Harley-Davidson motorcycles, among other products). Instead, it plans to respond with a new package of countermeasures affecting up to EUR 26 billion in U.S. exports. The targeted sectors include:
- Industrial – steel, aluminum, leather, home appliances, household tools, plastics, and wood products;
- Agricultural – poultry, beef, seafood, nuts, eggs, dairy, sugar, and vegetables;
- Drinks – beer, wine, gin, rum, tequila, whisky, and non-alcoholic beverages.
The EU expects to implement these measures by mid-April.
