United States Elevates Tariffs on Steel and Aluminum
Trump raises the import tax to 25% on the former—while restoring the latter to 25%—in a move that could potentially take effect on March 4.
Amid last week’s 30-day pause that had been placed on Canada and Mexico tariffs,1 President Trump recently reinstated a 25% steel import tax, along with raising the tariff rate on aluminum from 10% to 25%.2
The latest measures will apply to metals coming from all countries, but are not expected to take effect until March 4, if they do end up coming to fruition.2
These tariffs, writes the White House, are intended to protect valuable sectors that have been affected by “unfair trade practices and global excess capacity.” In adjusting these taxes, they will serve as an addition to Trump’s Section 232 tariffs that he had enacted back in 2018, which are originally derived from the Trade Expansion Act of 1962.3,4
Various nations, including Argentina, Australia, Brazil, Canada, Japan, Mexico, South Korea, the European Union, Ukraine, and the UK, had been granted exemptions over the years, which have limited the tariffs’ effectiveness.
The White House also pointed to the domestic steel industry taking a hit, due to a combination of the COVID-19 pandemic and a high volume of imports that had previously been exempted from the Section 232 tariffs; utilization decreased from 80% in 2021 to 77.3% and 75.3% respectively.
Regarding aluminum, there was a rise in the capacity utilization rate between 2017 and 2019, but it felt from 61% to 55% between 2019 and 2023.
Although these are yet to be confirmed as of press time, a Reuters report2 notes that there is also a possibility that Trump enacts reciprocal tariffs on all nations that have imposed taxes on US goods—including cars, pharmaceuticals, and semiconductors.
Being that there is uncertainty in terms of how this will unfold, there is plenty of value in the pharma supply chain preparing for all scenarios.
“Regardless of whatever the political environment is or other ecosystem kind of environmentally-related topics that may be of concern here, I think that it comes back to the manufacturers really having a continuity plan in place across their entire business and understanding how they can try to mitigate any risks, hurdles, or challenges that they may face, and ultimately, try to achieve development and commercialization of these therapies,” Jenna Dale, director of client relations at Cencora told Pharma Commerce in a video interview last week.5
Meanwhile, there have also been reports6 that India may be making additional tariff cuts that could help US exports to the South Asian country, although this is yet to occur.
References
1. Saraceno N. Trump Pauses Canada and Mexico Tariffs. Pharmaceutical Commerce. February 4, 2025. Accessed February 11, 2025. https://www.pharmaceuticalcommerce.com/view/trump-pauses-canada-mexico-tariffs
2. Holland S, Lawder D, Shalal A. Trump raises tariffs on aluminum, steel imports in latest trade war salvo. Reuters. February 11, 2025. Accessed February 11, 2025. https://www.reuters.com/markets/asian-eu-steelmakers-shares-fall-after-trump-escalates-tariffs-2025-02-10/
3. Adjusting Imports of Steel into the United States. The White House. February 10, 2025. Accessed February 11, 2025. https://www.whitehouse.gov/presidential-actions/2025/02/adjusting-imports-of-steel-into-the-united-states/
4. Fact Sheet: President Donald J. Trump Restores Section 232 Tariffs. The White House. February 11, 2025. Accessed February 11, 2025. https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-restores-section-232-tariffs/
5. Saraceno N. Properly Preparing for Tariffs and Other Supply Chain Obstacles. Pharmaceutical Commerce. February 5, 2025. Accessed February 11, 2025. https://www.pharmaceuticalcommerce.com/view/properly-preparing-for-tariffs-supply-chain-obstacles
6. Singh SC, Acharya S, Patel S. India's Modi to meet Trump with planned tariff concessions, sources say. Reuters. February 10, 2025. Accessed February 11, 2025. https://www.reuters.com/world/indias-modi-meet-trump-with-planned-tariff-concessions-2025-02-10/
