On March 12, 2025, the import tariff policy on steel and aluminium products announced by U.S. President Trump officially took effect.
A Shift from Selective Strikes to Global Tariffs
Starting March 12, a uniform 25% tariff will be imposed on steel and aluminum products from all countries entering the U.S., eliminating duty-free quotas previously granted to allies like the EU and Canada.
Expanded Scope:
Downstream derivatives (e.g., nuts, bolts, cans, auto parts) are now included in the taxable range.
Aluminum tariffs increased from 10% to 25%, with Russian aluminum facing a punitive 200% tariff.
Sole Exemption:
Only derivatives made exclusively from U.S.-smelted raw materials are exempt. However, companies must submit smelting records, certificates of origin, and other documentation for verification by U.S. Customs (CBP).
Enforcement via "Precision Strikes"
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BP now requires tariffs to be calculated based on the market value of steel and aluminum components in products, with full supply chain documentation (e.g., smelter records, processing certificates) traced back. If the value cannot be determined, the full product value must be declared and subjected to the 25% tariff.
This move directly targets transhipment trade, cutting off traditional rerouting methods that Chinese and other foreign steel producers have used to access the U.S. market.
The Decline of Transshipment Trade & Its Threefold Impact
This new tariff policy strengthens origin rules and customs traceability, completely blocking the traditional third-country rerouting of Chinese steel and aluminium into the U.S.
Vietnam’s Transshipment Channel Disrupted
- In 2024, Vietnam’s steel exports to the U.S. surged by 143%, with about 65% originating from Chinese companies rerouting through it.
- The new policy kills the profit margin for transhipment, making this route no longer viable.
Mexico's Double Challenge
- Chinese automakers previously bypassed tariffs by assembling aluminium body parts in Mexico, but now the new policy mandates U.S.-sourced aluminium.
- Mexico itself imposed an 80% tariff on Chinese galvanized steel in 2023, leaving Chinese exporters trapped between U.S. and Mexican barriers.
Three Major Global Consequences:
- EU Carbon Tariffs Tighten the Noose – The Carbon Border Adjustment Mechanism (CBAM), taking effect in 2026, will add 15% to 20% in hidden costs for transhipment trade.
- Emerging Markets Retaliate – Countries like Vietnam and South Korea have launched anti-dumping investigations into Chinese steel, shifting transhipment destinations into new battlegrounds.
- Global Price War Intensifies – Excess steel and aluminium capacity is now being dumped back into China, causing rebar futures to drop 4.2% in a week and creating inventory backlogs.
Lessons for Global Businesses
The ripple effect of the U.S. steel and aluminium tariffs extends beyond China. Manufacturers worldwide, from Europe to Southeast Asia, are now forced to rethink their supply chain strategies.
Key Takeaways:
Market Diversification Is Key – Businesses must explore alternative markets such as ASEAN and Africa, where infrastructure demand is rising.
Product Upgrading for Higher Value – Low-cost mass production is no longer a sustainable model. Companies must invest in high-tech, high-value materials.
Supply Chain Visibility & Compliance – With increasing scrutiny, real-time customs data, import/export tracking, and supply chain transparency will be critical.
Final Thought: The Global Trade Landscape Is Changing
The 2025 U.S. steel and aluminium tariffs signal a shift toward regional self-sufficiency and strategic decoupling. But history has shown that tariff barriers often force industries to innovate and adapt.
From the photovoltaic industry in the 2010s to the current new energy and green steel movement, businesses that pivot early will not only survive but thrive.
For companies navigating this complex trade environment, leveraging real-time trade data and strategic foresight will be the key to staying competitive in the next decade.
Learn more about how data can empower trade here.