US President Donald Trump signs off on 25% tariffs on steel and aluminum

Joshua Gibson FXStreet

US President Donald Trump kicked off the next leg of his ongoing trade war spat with functionally all of the US' closest trading partners and allies, imposing a sweeping 25% tariff on all steel and aluminum imports into the US. The White House noted that President Trump has done away with exclusions on import taxes entirely, and stated that the Trump administration would be looking at further action on microchips and vehicles in the days and weeks to come.

Key highlights

Trump uses proclamations to apply tariffs on all steel and aluminum imports, and raise them to 25% from 10%.
Actions will expand tariffs to downstream products, not just raw materials.
White House says no exemptions on tariff goods, Trump says no exemptions except for maybe Australia.
Trump says his administration will look into tariffs on automobiles, microchips, and pharmaceuticals next.

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

AUD/USD consolidates above 0.7000/two-month low; bearish potential intact

The AUD/USD pair oscillates in a narrow range during the Asian session, and moves little following the release of mixed inflation figures from China. Spot prices currently trade around the 0.7025 region, nearly unchanged for the day, and remain within striking distance of a nearly two-month low set on Tuesday. Renewed hostilities between the US and Iran temper hopes for a deal to end the over three-month-old war.

Japanese Yen languishes despite wholesale inflation accelerates in May

USD/JPY flatlines after experiencing volatility, trading around 160.40 during the Asian hours on Wednesday. The pair continues to hold its ground, reflecting a struggling Japanese Yen that has failed to find support despite a massive acceleration in wholesale inflation. Driven by surging energy costs linked to the ongoing Middle East conflict, Japan’s Producer Price Index jumped 6.3% year-over-year in May. This hot printing comfortably outpaced April’s upwardly revised 5.3% figure and surpassed market consensus of 5.5%, marking the fastest pace of wholesale price growth in three years.

Gold plummets below $4,200 amid US‑Iran tensions ahead of US CPI

Gold extends the recent breakdown momentum below a technically significant 200-day Simple Moving Average (SMA) and drops to a fresh low since March 23, further below the $4,200 mark during the Asian session. Crude Oil prices rise amid renewed hostilities between the US and Iran, fueling inflation fears and bolstering bets for more hawkish central banks.

Bitcoin remains vulnerable, Ethereum weakens further, XRP signals more downside

Bitcoin, Ethereum, and Ripple remain under pressure mid-week, as the broader cryptocurrency market struggles to regain recovery momentum after last week’s massive correction. BTC struggles below $62,000, ETH continues to weaken below $1,650, while XRP’s momentum indicators remain biased toward further downside.

US CPI data set to show inflation at three-year high in May, backing Fed hawkish tilt

The US Bureau of Labor Statistics will publish the May Consumer Price Index (CPI) data on Wednesday. The report is expected to show another step up in consumer inflation, driven by the persistently high Oil prices due to the ongoing crisis in the Middle East.

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.