Donald Trump has signed two proclamations imposing 25% tariffs on all steel and aluminium imports to the US.

A proclamation is a form of presidential directive to government officials, but they do not carry the force of law, as an executive order would.

However the White House has said the tariffs will take effect from 4 March.

“This is a big deal,” Mr Trump said in the Oval Office as he announced the tariffs. “The beginning of making America rich again.”

He added: “We were being pummelled by both friend and foe alike.”

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The proclamations mean the president has now removed the exceptions and exemptions from his 2018 tariffs on steel to allow for all imports of the metal to be taxed at 25%.

The new tariff on aluminium is also much higher than the 10% duty he imposed on the material in his first term.

The tariffs are part of an aggressive push by Mr Trump to reset global trade, as he claims that price hikes on the people and companies buying foreign-made products will ultimately strengthen domestic manufacturing.

Outside economic analyses suggest the tariffs would increase costs for the factories that use steel and aluminium, possibly leaving US manufacturers worse off.

Canada, the largest source of steel imports to the US, criticised the move.

Candace Laing, CEO of the Canadian Chamber of Commerce, said Mr Trump was destabilising the global economy.

“Today’s news makes it clear that perpetual uncertainty is here to stay,” she said.

Hard to see how tariffs won’t be inflationary

Ed Conway

Economics and data editor

@EdConwaySky

At least part of the idea behind tariffs is to bring some production back to the US, but imposing them will have consequences.

What kinds of consequences? Well, at its simplest, tariffs push up prices. This is, when you think about it, blindingly obvious.

A tariff is a tax on a good entering the country.

So if aluminium and steel are going up in price then that means, all else equal, that the cost of making everything from aircraft wings to steel rivets also goes up.

That in turn means consumers end up paying the price – and if a company can’t make ends meet in the face of these tariffs, it means job losses – possibly within the very industrial sectors the president wants to protect.

So says the economic theory. But in practice, economics isn’t everything.

There are countless examples throughout history of countries defying economic logic in search of other goals.

Perhaps they want to improve their national self-reliance in a given product; perhaps they want to ensure certain jobs in cherished areas or industries are protected.

But nothing comes for free, and even if Donald Trump’s tariffs succeed in persuading domestic producers to smelt more aluminium or steel, such things don’t happen overnight.

In the short run, it’s hard to see how these tariffs wouldn’t be significantly inflationary.

Trump’s war of tariffs

Mr Trump’s proclamations come days after the US imposed a 10% tariff on all goods imported from China.

In return, China imposed 10% tariffs on American crude oil, agricultural machinery, large-displacement cars and pickup trucks.

There will also be 15% tariffs on coal and liquefied natural gas from the US.

US plans to impose 25% tariffs on Mexico and Canada were paused after agreements were reached on border security.

Mexico’s president said she was sending 10,000 National Guard troops to the US border immediately in return for a tariff delay.

Mr Trump said the Mexican soldiers would be “specifically designated” to stop the flow of fentanyl into the US, as well as illegal migrants.

Meanwhile, Canada’s prime minister Justin Trudeau said almost 10,000 frontline personnel “are and will be working on protecting the border”.

He added that his country was appointing a “fentanyl czar”, drug cartels would be listed as terrorists, and there would be “24/7 eyes on the border”.

British wholesale gas prices have reached a more than two-year high, risking yet more expensive energy bills.

Low rates of gas storage in Britain and across Europe, combined with cold weather, have increased demand for gas to heat homes.

It’s brought the price up to 140 pence a therm (a unit of heat used to measure gas), a high not seen since January 2023.

Higher gas prices can bring up household bills as electricity costs are linked to wholesale costs.

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Britain is reliant on European gas imports and has less storage capacity than its neighbours.

Last month, the owner of Britain’s largest gas storage site said levels in the country were “concerningly low”.

European storage levels have been depleted by cold weather and are now at approximately 50% capacity, well below the roughly 70% level recorded this time last year.

Gas is bought during cheaper periods, including when demand is lower in the summer, and then stored for use during times of high demand.

Britain is still reliant on the fossil fuel to generate electricity and heat homes and so is vulnerable to volatile prices.

Global trade tensions have stoked fears of more supply shocks. On Monday, China slapped a 15% tariff on US gas in response to Donald Trump’s tax on Chinese imports.

Since Russia’s invasion of Ukraine three years ago gas costs have increased as Europe sought to limit its use of Russian supplies. Russia, however, remains a key source of gas for the continent.

Already expensive bills

Energy bills have already been going up. At the start of last month, energy regulator Ofgem brought up the energy price cap, which limits the unit cost of energy, amid forecasts of a further rise in April.

The energy price cap is revised every three months. A final decision on the cap for April, May and June will be made on 25 February.

Few materials matter quite as much as steel and aluminium.

Steel, an alloy of iron and carbon, is the main metallic ingredient in the structures we live in and the bridges we build. If it’s not made of steel it’s made with steel.

Aluminium, on the other hand, is a wonder material we use with wild abandon these days. A light metal we use in planes and trains, in the bodies of electric vehicles and in those high voltage power lines we’ll need so many of to provide electricity in the coming years.

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All of which is to say these metals are the bedrock for much of the world around us. And like most developed economies, the US is far from independent when it comes to these materials. The degree of dependence on other countries varies between them.

According to the US Geological Survey, America’s “net import reliance ratio” for aluminium is close to 50%, implying it is deeply dependent on imports to satisfy demand among its companies. The degree of dependence is considerably lower for steel – only a little over 10%.

At least part of the idea behind tariffs is to bring some production back to the US, but imposing them will have consequences.

What kinds of consequences? Well, at its simplest, tariffs push up prices. This is, when you think about it, blindingly obvious. A tariff is a tax on a good entering the country. So if aluminium and steel are going up in price then that means, all else equal, that the cost of making everything from aircraft wings to steel rivets also goes up. That in turn means consumers end up paying the price – and if a company can’t make ends meet in the face of these tariffs, it means job losses – possibly within the very industrial sectors the president wants to protect.

So says the economic theory. But in practice, economics isn’t everything. There are countless examples throughout history of countries defying economic logic in search of other goals. Perhaps they want to improve their national self-reliance in a given product; perhaps they want to ensure certain jobs in cherished areas or industries are protected. But nothing comes for free, and even if Donald Trump‘s tariffs succeed in persuading domestic producers to smelt more aluminium or steel, such things don’t happen overnight. In the short run, it’s hard to see how these tariffs wouldn’t be significantly inflationary.

There’s a deeper issue here, which comes back (as so many of Mr Trump’s economic measures do) to China. Both the steel and aluminium markets have faced enormous influxes of cheap Chinese metals in recent years – to the extent that in recent months those Chinese imports have actually been cheaper than the cost of production in Europe.

To some extent, that’s a consequence of high European energy costs, but it’s partly down to the fact that China subsidises its producers more than most other countries around the world. Indeed, of all the products in the world, few have had as many cases lodged at the World Trade Organisation as steel.

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But while it’s worth being aware of these dynamics, which are pushing cheap steel into many markets, it’s also worth noting that the US actually imports far less from China than you might have thought. The vast majority of American aluminium imports, for instance, come from Canada rather than China. Any tariffs on the metal would further undermine the economic relationship between these parts of North America.

Much, of course, now depends on the structure and detail of these tariffs – and the extent to which they’re actually implemented. As with his threatened tariffs on Canada and Mexico, these ones raise as many questions as they answer. That is likely to be the way of things for much of this presidential term.