Trump’s boldest move yet: Reciprocal tariffs reshape global trade and fortify US steel industry

The Trump administration has introduced reciprocal tariffs, matching about half the rates imposed by US trade partners, with a minimum of 10%, to boost domestic industries and achieve "economic independence." While praised by US steel manufacturers for protecting jobs, the effect on trade relationships with partners like Canada and Mexico remains uncertain.

Key updates on U.S. tariff policies and their impact

  • Reciprocal tariffs introduced: New tariffs match half the rates of US trade partners, with a minimum of 10%
  • Protectionist strategy expanded: Recent tariffs include 25% on auto imports and additional measures on Canada and Mexico
  • No exemptions allowed: The new tariffs explicitly ban any exemptions or exclusions
  • Impact on trade: Tariffs aim to boost US steel but could hurt partners like Canada and Mexico

Trump announces reciprocal tariffs to reshape trade policy

In an already tariff-soaked steel market, the second Trump administration has announced its biggest, boldest one yet — reciprocal tariffs affecting every American trade partner.

President Donald Trump made the announcement in the White House Rose Garden late Wednesday April 2. In a “very generous” gesture, Trump said the reciprocal tariffs will be roughly half the tariffs charged by other nations on exports from the US for a variety of products and will also include consideration of alleged currency manipulation.

This includes a minimum baseline tariff of 10%.

Economic independence is a bold move with global implications

“For decades, our country has been looted and pillaged… by nations both near and far, friend and foe alike,” Trump said during the press conference. “It’s our declaration of economic independence.”

The tariffs are the latest in a string of protectionist measures from Trump.

In late March, the Trump administration hit all auto imports with a 25% tariff. Earlier that same month, Canada and Mexico received 25% on a variety of goods.

It is unclear to what extent any — or all — of the tariffs stack with the administration’s biggest hit to the metals industry, also implemented in March — a 25% tariff on steel and aluminium imports.

That rehash of the original Section 232 steel and aluminium tariffs came with a very important difference; the original tariff provided for exclusions and exemptions if certain policy conditions were met.

Now, such exclusions and exemptions are explicitly barred.

America first trade policy signals stronger domestic focus

“It’s no surprise that on Liberation Day, President Trump invited a large group of steelworkers to participate in his reciprocal tariff announcement at the Rose Garden,” Vogel Group managing principal Samir Kapadia told Fastmarkets. “For the President, it all started with the steel industry during his first term. I think we are going to find many of the contours of his Section 232 policy woven into a much larger trade framework for the world. As it stands, Canada and Mexico have the most to lose.”

That appears to align with another quip from Trump during the press conference — “In many cases, the friends are worse than the foes.”

Steel Manufacturers Association president Philip Bell called Trump a “champion of the domestic steel industry” in an April 2 statement.

“President Trump is a champion of the domestic steel industry, and his America First Trade Policy is designed to fight the unfair trade that has harmed American workers and weakened manufacturing in the United States,” he added. “On a level playing field, American workers can outcompete anyone.”

“The Steel Manufacturers Association is proud to celebrate with President Trump today at the first Rose Garden ceremony of his second administration,” Bell said. “The last time we gathered with President Trump at the White House, he signed the initial 232 tariffs on steel, which revitalized our industry.”

Fastmarkets’ steel insights provide key data and analytics to forecast trends, manage risk, and optimize strategy. Find out more here.

What to read next
Five key takeaways from our CIPS webinar.
Investors in the US corn and wheat markets amassed shorts in the week to Tuesday May 13, moving corn from a net long to a net short for the first time since October, data from the Commodity Futures Trading Commission (CFTC) showed late on Friday May 16.
The US aluminium industry is experiencing challenges related to tariffs, which have contributed to higher prices and premiums, raising questions about potential impacts on demand. Alcoa's CEO has noted that sustained high prices could affect the domestic market. While trade agreements might provide some relief, analysts expect premiums to remain elevated in the near term. However, aluminum demand is projected to grow over the long term, supported by the energy transition and clean energy projects. To meet this demand, the industry will need to increase production, restart idle smelters and address factors such as electricity costs and global competition.
The UK’s domestic bioethanol industry could be at risk as a result of the recent trade deal announced between the UK and the US, industry members have warned.
The MB-AL-0408 aluminium low-carbon differential P1020A, cif Mexico was published at 3:02pm London time on May 20 instead of the scheduled time of 3-4pm on May 27. The erroneous price has been removed from Fastmarkets’ pricing database. The price will next be published on May 27 at its usual time. This price is a part of the Fastmarkets […]
The DRC is set to decide on the future of its cobalt export ban on June 22, potentially extending, modifying or ending the policy. Aimed at boosting local refining and value creation, the ban has left global markets uncertain, with stakeholders calling for clarity as cobalt prices fluctuate and concerns over long-term demand grow.