President Trump signed an executive order on Tuesday (June 3rd), raising the import tariffs on steel and aluminum products from 25% to 50%, effective from 12:01 a.m. Eastern Time on June 4th. The White House stated that this move is aimed at combating dumping, protecting domestic production capacity, and safeguarding national security.
Products imported from the UK are temporarily exempted, maintaining a 25% tax rate. The executive order indicates that future adjustments will depend on the implementation of the Economic Prosperity Agreement between the two countries.
The Trump administration pointed out that while the previously imposed 25% steel and aluminum tariffs provided price support, they did not enable these industries to develop and maintain the necessary production capacity to ensure the long-term health of the industry and meet expected national defense needs.
The White House highlighted that in 2021, the capacity utilization rate of the U.S. steel industry briefly reached 80%, but subsequently, under import pressure, it decreased to 77.3% in 2022 and 75.3% in 2023. The Trump administration considers 80% as a critical threshold to safeguard the health of the industry and national defense needs.
The executive order stated that further increasing tariffs would more effectively counter foreign low-priced dumping of excess steel and aluminum into the U.S. market, thereby protecting the competitiveness of American industries.
President Trump’s imposition of additional tariffs is based on the authority granted by Section 232 of the Trade Expansion Act of 1962, aiming to adjust the import structure to protect national security.
The executive order specifies that the increased tariffs only apply to the steel and aluminum components in products, while other raw materials continue to be subject to existing tariffs.
Furthermore, the U.S. Customs and Border Protection (CBP) will issue new guidelines requiring importers to accurately declare the steel and aluminum content. If underreported or falsely reported, importers may face “significant fines, loss of import privileges, and even potential criminal liability.”
In the executive order, President Trump noted that imported steel and aluminum products from the UK will temporarily maintain a 25% tax rate and are not included in the scope of the additional tariffs. This exemption is in line with the Economic Prosperity Agreement signed on May 8th, and whether the rate will be raised to 50% in the future will depend on the UK’s compliance with the relevant terms.
According to a report from the Financial Times, the UK industry has expressed dissatisfaction with the progress of the agreement’s implementation and urged Prime Minister Sir Keir Starmer to accelerate the implementation in order to secure the promised zero-tariff quotas from the U.S.
Under the EPD terms, if the UK meets the U.S. security requirements regarding “excluding China’s supply chain,” it will be eligible for a zero-tariff quota for steel.
The executive order also explicitly states that the relevant tariff rates and quota arrangements will be reviewed after July 9th, and if the UK is found to have failed to fulfill the agreement, the U.S. can increase the steel and aluminum tariffs on the UK to 50%.
In a statement released by the White House, it was highlighted that after the Trump administration imposed tariffs under Section 232 during the first term, U.S. steel and aluminum imports significantly decreased, with a nearly one-third decrease from 2016 to 2020. The metal industry created thousands of new job opportunities, wages increased, and it attracted over $10 billion in investments for building new steel plants.
The statement referenced studies from the U.S. International Trade Commission (USITC) and the Economic Policy Institute, indicating that tariffs only caused short-term price fluctuations without leading to inflation, but instead, promoted reshoring of industries.