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United States announces new tariffs on all imported steel

• In February 2025, the United States announced 25.0% tariffs on all imported steel with no exemptions or exceptions. The tariffs took effect on March 12, 2025. On June 4th, these tariffs were increased further to 50%. These tariffs were not impacted by a recent court decision that temporarily suspended duties on certain goods as they were implemented under Section 232 of the Trade Expansion Act.
• Previously, countries such as Canada, Mexico, and Brazil, the top exporters of steel to the United States, had exemptions from tariffs. These have now been removed and all imported steel, regardless of origin, will be subject to the 50.0% tariff. However, on May 8th, the US announced an agreement with the United Kingdom to remove all levies on steel exported from the UK.
• When tariffs on steel imports were introduced in March 2018, they contributed to an increase in the price of steel and steel products. According to the Bureau of Labor Statistics, the price of steel-milled products increased by 10.2% in the year after the tariffs were implemented. This market heavily relies on steel as an input and may be impacted by this policy.

Tariffs to negatively impact the industrial manufacturing and processing machinery sector

• In April 2025, the United States imposed a blanket 10.0% tariff on all US imports of foreign goods. On May 28th, the U.S. Court of International Trade issued a ruling halting many of the tariffs levied by the Trump administration. This ruling has been appealed, and the tariffs will remain in effect pending further judicial decisions. This ruling does not apply to steel, aluminum, and automobile tariffs issued under Section 232. Additionally, tariffs could be reissued under a variety of other sections of U.S. trade law. As such, ProcurementIQ will continue to monitor and update analysis as new information becomes available.
• The United States raised the tariff rate on steel and aluminum imports to 50.0% on June 4th. This is expected to increase the cost of manufacturing industrial machinery as raw material costs grow. As many raw materials and industrial machinery components, such as fittings, bearings, springs, nuts, gears, hydraulic systems, control modules, or bolts, are made from steel or heavily sourced from China, suppliers will be forced to raise the price of machinery to offset cost increases and maintain profit margins.
• China, Mexico, and Japan are three of the top sources of US imports of machinery, accounting for around 50.0% of US imports. While as of April 9, the reciprocal tariff of 24.0% on Japan will be paused, the Japanese machinery sector could face increased financial risk as it is heavily dependent on the US market for exports (US machinery imports from Japan account for nearly 25.0% of its total exports in value, according to Oxford Economics). US imports from China will now face a base tariff of 30.0%, down from 145.0%, after the agreement reached on May 12th, and goods imported from Canada and Mexico that are not compliant with the US-Mexico-Canada Agreement (USMCA) will be subject to a 25.0% tariff.
• According to the Association of Equipment Manufacturers, the increase in tariff rates on steel and aluminum in 2018 led to a 78.0% increase in domestic equipment production costs. In addition, retaliatory tariffs on machinery exports can contribute to disruptions in the domestic industry as the price of US manufacturers’ exports to China rises, making them less attractive to foreign buyers.
• Suppliers that source machinery or parts from tariff-affected countries may see supply chain disruptions or extended lead times as they seek alternative suppliers to mitigate tariff impacts. In addition, buyers seeking to rent industrial machinery will likely see higher rental rates as dealers pass on higher costs and possibly limited available units if supply chain issues occur.