President Donald Trump’s 2025 tariffs, which include a 25% tax on steel and aluminum imports, are reportedly expected to significantly impact Canada’s exports to the U.S., disrupting the cross-border trade flow. This move could escalate trade tensions, prompting potential retaliatory actions from Canada and other affected countries.
The Financial Times reported that the following 10 countries were the top suppliers of steel and aluminium to the U.S. in 2023, and they are likely to be hit hardest by these tariffs.
Each country is set to take a major hit from Trump’s latest tariffs.
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1. Canada – $25.26 billion
Canada is set to face significant economic challenges due to Trump’s 2025 steel and aluminum tariffs. As one of the largest suppliers of these materials to the U.S., Canada heavily depends on this trade, and the 25% tariffs will increase costs for Canadian producers, making their goods less competitive in the U.S. market. This could result in reduced export volumes and financial losses for Canadian businesses. Furthermore, retaliatory tariffs from Canada are likely, further hurting industries dependent on the U.S. market. Additionally, the tariffs could lead to job losses and lower overall economic growth in affected sectors.
2. China – $13.86 billion
These tariffs will result in decreased sales and lost market share, adversely affecting China’s manufacturing sector. Additionally, China may encounter retaliatory measures from the U.S. or other countries, escalating trade tensions and disrupting its broader economic growth. These tariffs may also hinder China’s efforts to diversify and upgrade its industrial base.
3. Mexico – $13.28 billion
Mexican producers will face increased costs, reducing their competitiveness in the U.S. market. This could result in decreased export volumes, financial losses for businesses, and potential job cuts in affected industries. Additionally, Mexico may retaliate with tariffs on U.S. goods, escalating trade tensions and further disrupting bilateral trade. These tariffs could also strain the USMCA (United States-Mexico-Canada Agreement) agreement, harming broader economic relations between the two countries.
4. South Korea – $5.71 billion
The 25% tariff will make South Korean steel and aluminum less competitive, leading to a drop in exports and financial losses for manufacturers. South Korea could also face retaliatory tariffs from the U.S., disrupting broader trade relations. This tension may exacerbate economic instability in key sectors, like manufacturing and automotive, which rely on these materials. Additionally, the tariffs could hinder South Korea’s efforts to diversify its economy and increase costs for industries that depend on steel and aluminum imports.
5. Brazil – $4.87 billion
Brazil had previously benefited from exemptions and quotas, but the new blanket tariff removes these, potentially raising costs for Brazilian exporters and reducing their competitiveness in the U.S. market. The Federation of Industries of the State of Minas Gerais (Fiemg) has raised concerns, warning that the tariffs could harm Brazil’s economy. This policy shift may prompt Brazil to retaliate or seek new markets, highlighting the volatility of global trade and the impact of changing policies on established trade patterns.
6. Germany – $4.49 billion
Germany, known for its top steel manufacturers, is likely to be strongly affected. Since its car and engineering industries rely on exports to the U.S., the tariffs could slow down industrial growth and raise costs for German companies.
7. Taiwan – $4.38 billion
Taiwan will be negatively impacted by Trump’s 2025 steel and aluminum tariffs, as it relies heavily on U.S. exports. The 25% tariff will make Taiwanese goods less competitive due to higher costs, particularly affecting industries like electronics and automotive that depend on these materials. Furthermore, Taiwan could face strained trade relations with the U.S., potentially leading to retaliatory tariffs or reduced market access. This situation forces Taiwan to find alternative markets or absorb the financial burden, disrupting its established trade patterns and threatening the stability of its key manufacturing sectors.
8. India – $4 billion
India reportedly ranks eighth among the top exporters of steel and aluminium to the US, meaning it won’t be spared from the impact of these tariffs.
The U.S. is one of India’s key export destinations for these metals, and the 25% tariff will reduce India’s market share, forcing Indian manufacturers to lower prices or absorb higher production costs. Moreover, India’s domestic steel market, already facing overcapacity, may suffer from surplus stock as a result of reduced U.S. demand. This could lead to increased competition and price drops in the local market, hurting the profitability of Indian producers and disrupting its industrial growth.
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9. Japan – $3.22 billion
Japan makes high-tech steel and aluminum products that are important for industries like cars and electronics. Higher tariffs could make these products more expensive in the U.S., which might lower demand and harm exports.
10. Italy – $2.73 billion
Italy could face unique challenges due to Trump’s 2025 tariffs on steel and aluminum. Italy is home to high-quality steel and aluminum production, with significant investments in industries like automotive and aerospace, which rely on these materials. The tariffs could disrupt the supply chains that Italian manufacturers use to export products like luxury cars, machinery, and electronics to the U.S. Italian manufacturers may struggle to absorb higher material costs or pass them on to consumers, harming competitiveness. Additionally, with the EU planning retaliatory measures, Italy could find itself caught in broader trade conflicts, further disrupting its economy.