25% Steel and Aluminum Tariffs

The new policy carried no country exemptions. All previous Section 232 steel and aluminum country exemptions and tariff-rate quota deals with Canada, Mexico, the European Union, Japan, South Korea, Australia, and others were eliminated. The administration's rationale was that those prior arrangements had become a liability. The administration's view was that by allowing certain countries to bypass the tariffs, the U.S. had unintentionally created loopholes that were exploited by China and other nations with surplus steel and aluminum production, undermining the intent of the exemptions.

The policy did not hold at 25% for long. On May 30, 2025, President Trump announced the steel and aluminum tariffs would double to 50 percent beginning on June 4, 2025, for all countries except the United Kingdom. According to the proclamation, the Trump administration granted the UK different treatment to make space for completing negotiations of the U.S.-UK Economic Prosperity Deal. On June 13, 2025, the Trump administration announced an expansion to apply the tariffs to the steel content of eight more product lines, including dishwashers, refrigerators, washing machines, dryers, freezers, stoves, ovens, and food waste disposals, effective June 23, 2025. Following the first-ever inclusions process, the Commerce Department added more than 400 product codes within the scope of tariffs by August 2025.

The policy continued to evolve into 2026. In April 2026, President Trump made significant further changes, including imposing tariffs on the full value of goods rather than just the metal content, lowering or eliminating tariffs for certain derivatives, imposing a 10 percent tariff on derivatives containing 95 percent U.S.-sourced steel and aluminum, and eliminating the inclusions process. In June 2026, the president issued a proclamation that would temporarily lower the tariffs on some agricultural and industrial equipment to 15 percent until 2028, at which point they would increase to 25 percent. In July 2026, the president announced that aluminum refineries entering into onshoring agreements with the federal government would be able to import primary aluminum at half the current tariff rate.

Significance and Impact

The tariffs were significant both in their scope and their departure from the country-specific arrangements that had defined the first-term version of the policy. By eliminating exemptions and then doubling the rate, the administration created a far more uniform, higher-cost import regime. The tariffs sent the U.S. price of steel to levels twice as high as other markets, and aluminum prices soared in lockstep with the tariffs. The 50 percent rate ultimately put in place was twice as high for steel—and five times as high for aluminum—as was first imposed in 2018.

BCG estimated that the doubling of tariffs on steel and aluminum imports into the U.S. would increase tariff costs to $50 billion. The burden did not fall evenly across industries. In the oil and gas sector, tariffs sent costs soaring for energy production, one of the largest users of steel—complicating the administration's own "energy dominance" agenda. More broadly, the elimination of prior country-specific exemptions threatened a profound impact for participants in international trade, particularly those in manufacturing, construction, oil and gas, and other sectors relying on steel and aluminum products.

The administration argued the policy was producing tangible results at home. The White House claimed that in 2025, the United States became the third-largest steel-producing nation in the world, and that new steel plants were being built in America for the first time in a generation. Over 4 million tons of new crude steelmaking capacity was expected to become operational within two years, including in West Virginia, Arkansas, and South Carolina. Historical data from the first term offered a partial precedent: U.S. raw steel production rose from 95 million net tons in 2018 to 96.7 million net tons in 2019, and employment in the iron and steel sector increased by approximately 3,200 jobs during that period. Critics noted, however, that the overall impact on domestic manufacturing jobs was likely to be mixed, with some sectors experiencing modest job growth while others—particularly those more sensitive to tariff increases—faced job losses.

Reactions and Debate

The tariffs triggered immediate retaliation from major trading partners. Major trade partners swiftly hit back at Trump's increased tariffs on aluminum and steel imports, imposing stiff new taxes on U.S. products from textiles and water heaters to beef and bourbon. Canada, the largest supplier of steel and aluminum to the U.S., announced 25 percent reciprocal tariffs on steel products as well as tariffs on a host of other items including tools, computers, servers, and sports equipment. The European Commission announced counter-tariffs on U.S. goods worth up to 26 billion euros, matching what it described as the economic scope of the U.S. tariffs. The EU's retaliatory duties were primarily aimed at products made in Republican-majority states, such as beef and poultry from Kansas and Nebraska—in an apparent effort to apply political pressure on Trump's base.

The diplomatic strain extended beyond trade ledgers. European Commission President Ursula von der Leyen said that the bloc "deeply regrets" the new tariff measures, warning they were "bad for business, and even worse for consumers." The national security framing used to justify the tariffs drew particular skepticism from allies. During the first term, Canadian leaders had called the argument that Canada posed a national security threat "absurd, illogical, and illegal," and similar objections resurfaced in 2025.

The domestic debate followed familiar lines. Some business groups asserted that the 2025 tariff expansion negatively affected U.S. manufacturers, while some U.S. steel and aluminum producers asserted that the tariffs were critical for boosting U.S. production. The U.S. Chamber of Commerce argued the steep tariffs were hurting U.S. manufacturers and that the economic harm was spreading. The Tax Foundation noted that the Section 232 tariffs, along with related trade measures, would reduce long-run U.S. GDP by 0.4 percent, and that the Trump tariffs had not meaningfully altered the trade balance while amounting to an average tax increase per U.S. household of $900 in 2026.

Outlook

As of mid-2026, the Section 232 steel and aluminum tariffs remain in place and continue to be modified. The policy has moved well beyond its initial 25 percent framework, having been doubled, expanded to new product categories, and selectively adjusted for allied trading partners through bilateral deals. The U.S.-UK arrangement—preserving a lower tariff rate in exchange for progress on a bilateral economic agreement—offers a potential template for how the administration may manage ongoing friction with other allies, though no comparable arrangements with Canada, the European Union, or other major partners appear to have been finalized.

Congress may consider whether to exercise its legislative prerogatives related to trade policy and monitor the potential effects of tariffs on the U.S. economy. The question of congressional authority over trade has long been a point of constitutional tension, and the breadth and pace of executive action under Section 232 has sharpened that debate. Whether any legislative countermeasure gains traction remains unclear.

The deeper question concerns the durability and coherence of the policy itself. The tariff structure has become increasingly complex, with differentiated rates depending on the country of origin, the metal content of derivative products, bilateral deal status, and whether a company has entered an onshoring agreement. The administration points to projected expansions in domestic steelmaking capacity and new investment in aluminum and copper smelting as evidence the policy is working. Skeptics argue that the costs to downstream manufacturers and consumers are real, rising, and unevenly distributed—and that the national security rationale, however legally available, does not resolve those tradeoffs. How the policy is ultimately judged will depend substantially on whether the production gains it has encouraged prove durable or whether retaliatory pressure and domestic cost burdens accumulate faster than the supply-side benefits materialize.

Sources

Tax Foundation, "Tariff Tracker: 2026 Trump Tariffs and Trade War by the Numbers" (Aug 2026)

Congressional Research Service / Congress.gov, "Section 232 Tariffs on Steel and Aluminum" (Jul 2026)

White House, "Fact Sheet: President Donald J. Trump Updates Tariffs on Steel, Aluminum, and Copper Imports" (Jun 2026)

White House, "Fact Sheet: President Donald J. Trump Increases Section 232 Tariffs on Steel and Aluminum" (Jun 2025)

AP News / WDBJ7, "Canada and the EU Swiftly Retaliate Against Trump's Steel and Aluminum Tariffs" (Mar 2025)

Foreign Policy, "U.S. Tariffs on Steel, Aluminum Prompt Retaliation From EU, Canada" (Mar 2025)

U.S. Chamber of Commerce, "The Painful Impact of the Steel and Aluminum Tariffs" (Nov 2025)

BCG, "June 2025 Update: The Impact of US Tariffs of 50 Percent on Steel and Aluminum" (Jun 2025)

AutoCare Association, "Section 232 Steel and Aluminum Tariffs" (2025)