Week of February 10 – 14, 2025 Developments
By: Kate Beale, Monica Gorman, and Chris Gundermann
Welcome to the first CGA trade roundup, where we will briefly highlight the latest developments in trade and explore business implications. If you have questions, the CGA team is ready to assist.
Trump Signs Global 25% Tariffs on All Steel and Aluminium Imports
On Monday, February 10th President Trump signed executive orders imposing tariffs of 25% on all global steel and aluminium imports. These new tariffs will apply to major trading partners that had previously negotiated exemptions to U.S. tariffs on steel and aluminium during Trump’s first term and the Biden Administration. This week, the White House stated that there would be no exemption process for these tariffs, which also apply to derivative steel and aluminium products, This action will likely increase the costs for many U.S. goods – ranging from dishwashers and autos to home construction materials – given the U.S. imports significant quantities of both metals. Looking ahead, several significant U.S. trading partners have already signalled they are considering retaliatory tariffs against the U.S.
Trump Announces New “Reciprocal Tariff” Trade Policy
On Thursday, February 13th President Trump signed a presidential memorandum initiating a new “reciprocal tariff” policy. In the memorandum, he directs the Commerce Department and the Office of the U.S. Trade Representative to submit reports on the proposed reciprocal tariffs for each foreign trading partner. Commerce Secretary nominee Howard Lutnick predicted that these reports would be ready by April 1st, and tariffs could be applied any time after. The reciprocal tariff levels would roughly equate to the difference between U.S. tariffs and the total amount of another country’s tariffs on U.S. imports, taxes on U.S. imports, non-tariff barriers, subsidies to domestic industries and exchange rates, and other trade factors. The tariffs would apply on top of existing tariffs.
3 Questions to Consider
- Multiple trading partners have announced plans to retaliate against the U.S.’s new steel and aluminium tariffs, although what form this retaliation will take is unclear. What steps can your company take now to reduce financial and operating exposure to escalating trade tensions?
- The White House stated that there will not be an exemptions process to the steel and aluminium tariffs, but it has also signalled interest in negotiating with strategic trading partners. Japan, Korea, and Australia have begun to explore how this might be possible through bilateral mechanisms, and Prime Minister Modi of India also raised this possibility during his recent visit to the White House. Which foreign markets would be priorities for your business operations?
- A reciprocal tariff regime will create new and significant administrative burdens and likely take some time to implement. How will reciprocal tariffs impact your company, and how can you get involved now in the policy process to shape your trade objectives?
