The global steel and aluminum markets are bracing for impact after US President Donald Trump announced a sweeping 25% tariff on all steel and aluminum imports. With the tariffs set to take effect on March 12 “without exceptions or exemptions,” major trade partners of the US are weighing their options—whether to push for exemptions, retaliate, or adapt to a new trade landscape.
The US is heavily reliant on steel imports, sourcing nearly a quarter of its steel from foreign suppliers, according to the American Iron and Steel Institute. Its dependence on aluminum is even greater, with Canada, Mexico, and several Asian nations being key sources.
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With just over a month to go before the tariffs kick in, here’s how some of the world’s biggest steel exporters are responding.
Canada: A Major Supplier Ready to Fight Back
Canada, the largest supplier of both steel and aluminum to the US, stands to lose the most. Industry Minister François-Philippe Champagne has denounced the decision as “totally unjustified.”
In a post on X, Champagne highlighted that Canadian steel is integral to key US industries, including defense, shipbuilding, and energy, making “North America more competitive and secure.” He warned that Canada’s response would be “clear and calibrated,” hinting at potential countermeasures.
Australia: A Special Exemption in the Works?
Despite Trump’s insistence on “no exceptions,” Australia appears to be on the verge of securing one. Australian Prime Minister Anthony Albanese revealed that he had spoken with Trump, who suggested Australia might receive an exemption due to its unique trade relationship with the US.
Trump noted that the US runs a trade surplus with Australia, largely due to aircraft sales. “They buy a lot of airplanes. They’re rather far away and they need lots of airplanes,” he remarked. Though Australia is the world’s largest exporter of iron ore, its steel exports to the US remain relatively minor, accounting for about 1% of total US steel imports. However, Australian steel plays a critical role in US military shipbuilding, a potential factor in Trump’s reconsideration.
UK and Europe: Retaliation on the Table
The British government has yet to issue an official response, but UK Steel, a key industry body, has sounded the alarm. “The US is our second-largest export market after the EU,” said UK Steel Director General Gareth Stace. “At a time of shrinking demand and high costs, rising protectionism globally, particularly in the US, will stifle our exports and damage over £400m ($494m) worth of the steel sector’s contribution to the UK’s balance of trade.”
The European Union has taken a stronger stance. European Commission President Ursula von der Leyen has warned that “unjustified tariffs on the EU will not go unanswered.” She pledged “firm and proportionate countermeasures” to protect the EU’s economic interests.
The EU has significant exposure, as the US is its second-largest market for iron and steel exports. Trump previously imposed tariffs on the EU during his first term, but those measures were later relaxed by the Biden administration. With this new round of tariffs, tensions are likely to escalate again.
India: Brushing Off the Impact—For Now
India’s Steel Secretary Sandeep Poundrik has downplayed concerns over the tariffs, pointing out that India’s steel exports to the US are minimal. “We produced 145 million tonnes of steel last year, of which 95,000 tonnes was exported to the US. So, how does it matter?” he asked at an industry event.
However, the Indian Steel Association (ISA) sees potential risks. ISA Chief Naveen Jindal warned that the US tariffs could lead to an influx of surplus steel into India, potentially disrupting domestic prices. “These tariffs are expected to slash steel exports to the US by 85%, creating a massive surplus that will likely flood India, which is one of the few major markets without trade restrictions,” Jindal cautioned.
South Korea: Seeking a Negotiated Solution
South Korea, a major exporter of steel to the US, is actively exploring diplomatic channels. Trade Minister Cheong In-kyo said Seoul would “actively consider” whether negotiations with Washington could lead to an exemption.
Seoul successfully negotiated a quota-based exemption in 2018, when Trump imposed similar tariffs. South Korean steel is crucial to homegrown giants like Hyundai, Kia, Samsung, and LG, all of which have manufacturing operations in the US and Mexico. Whether South Korea can replicate its previous success in securing a waiver remains to be seen.
What Comes Next?
With the clock ticking, it remains uncertain which countries will be able to cut deals with the Trump administration before the March 12 deadline.
Eswar Prasad, an international trade policy expert at Cornell University, suggests that in the long run, trading partners may look to diversify their markets to reduce reliance on the US. However, he acknowledges that “Trump’s drastic actions have put the rest of the world on the back foot” given the sheer size and strength of the US economy.
Wendy Cutler, Vice President of the Asia Society Policy Institute, sees limited room for maneuvering. “While overtures may be made to work with the Trump team to avert the tariffs, our partners may conclude that tariffs are coming so fast and furious that negotiations are not a durable option.”
As the deadline looms, global steel producers are faced with tough choices—either find a way to secure an exemption, brace for retaliatory tariffs, or shift their strategies to mitigate the fallout from Trump’s latest trade move.
