After putting a pause on the threatened 25 percent tariff of Canadian and Mexican goods, President Trump announced that years old tariffs on steel and aluminum would be reinstated and increased1 and ordered the development of a plan to restore fairness in US trade relationships.2
In Fact Sheet: President Donald J. Trump Restores Section 232 Tariffs, the administration provides that the effective rate of tariffs on both steel and aluminum will increase to 25 percent. This will be applicable to imports of steel and derivative steel goods as well as aluminum and derivative aluminum goods from Canada and certain other countries. The fact sheet states that exemptions that had been in place will be revoked in the interest of closing importing loopholes and to ultimately revitalize the domestic steel and aluminum industries so they may achieve sustainable capacity utilization of at least 80 percent. The adjustment to these tariffs is set to take effect on March 12, 2025.
In addition to scheduling a tariff increase on these metals, President Trump sent a memorandum to direct certain members of his administration to develop a comprehensive plan to counter nonreciprocal trading arrangements. The goal of the plan is to determine an equivalent reciprocal tariff for US trading partners. President Trump’s advisors are directed to analyze current foreign trade relationships, including: tariffs on US products; unfair taxes on US businesses, workers, and consumers; subsidies that burden US individuals; practices that effect exchange rates; and the unfair limitation on market access. Once the relationship is understood, the advisors are to propose remedies to the trade relationships, which could include additional tariffs.
Currently, the 25 percent tariff that was paused on Canadian and Mexican goods is set to resume on March 4, 2025, a week before the steel and aluminum adjustments will take effect. In addition to the tariffs that are set to be implemented in March, the plan to counter nonreciprocal trading arrangements could lead to more tariffs in the future that are targeted at specific countries.
Attorneys at Barclay Damon will continue to monitor any executive updates and further guidance regarding these matters.
If you have any questions regarding the content of this alert, please contact Gust Pullman, International Practice Area co-chair and Canada-US Cross-Border Team co-leader, at gpullman@barclaydamon.com; Andy Oppenheimer, Business Services Practice Group co-leader and Tax Practice Area co-chair, at aoppenheimer@barclaydamon.com; Jordan Kilijanski, associate, at jkilijanski@barclaydamon.com; or another member of the firm’s Corporate Practice Area or Canada-US Cross Border Team.
1See Proclamation: Adjusting Imports of Steel into the United States (2025); Proclamation: Adjusting Imports of Aluminum into The United States (2025).
2See https://www.whitehouse.gov/fact-sheets/2025/02/fact-sheet-president-donald-j-trump-announces-fair-and-reciprocal-plan-on-trade/.