Speakers at this past week’s Recycled Materials Association (ReMa) conference in San Diego, California, said uncertainty over expanded 25 percent Section 232 tariffs on steel and aluminum enacted on March 12 by US President Trump, is likely to continue until more nations re-negotiate their tariff and non-tariff barriers individually with the US.
On Feb. 10, US President Trump expanded existing Section 232 tariffs on steel and aluminum to include all major US trade partners without exception. Later on April 2, on what Trump referred to as “Liberation Day,” the president announced an extensive list of nations that trade with the US that would be subject to individual non-steel related tariffs as part of Trump’s re-amagined global trade strategy.
One week later on April 9, Trump gave US trade partners a 90-day “pause” in which to renegotiate their tariff and non-tariff barriers with the US. During this time, various country-specific tariffs were suspended and a baseline 10 percent tariff on exports to the US was applied to all, with the exception of China, who’s tariffs were later dropped from an expanded 145 percent to 30 percent on May 12 following recent trade talks in Geneva.
“We’ve seen a real shift in the political landscape, which aims at giving the advantage in trade to American companies,” said the Honorable Nazak Nikakhtar, Chairwoman of the National Security Practice, and Partner of Washington, D.C-based Wiley Rein LLP., speaking at a morning session at ReMa. “Trump is focused on maintaining US leadership in world economies, starting with American jobs. He wants to make it easier for US companies to operate and become profitable on the world stage.”
As part of Trump’s first term, Nikakhtar served as the Department of Commerce’s Assistant Secretary for Industry & Analysis at the International Trade Administration (ITA). She also served as the agency’s primary liaison with US industry and trade associations as Undersecretary for Industry and Security at Commerce’s Bureau of Industry and Security (BIS).
Nikakhtar said uncertainty likely will continue in financial markets and steel market circles near term as it remains unclear what will happen with existing tariffs after the 90-day pause is complete in mid-July.
“We’re seeing two pretty stubborn leaders (Trump and Xi), who see a real benefit in saving face,” she added. “We’re likely to see action next on tariffs regarding India, Vietnam and South Korea.”
In the European Union, Nikakhtar said that in the near future, the EU is likely to implement export restrictions on scrap as part of its global initiatives to enhance regional security and become more self-reliant.
“We see the EU leaning closer to China at the moment,” she added. “At the moment, Trump is upset and has real disdain for the EU, because he says they have opened their markets to China, but not the US,” she said. Because of this ongoing situation, Nikakhtar said she expects near term retaliation from the Trump administration.
“For Trump, renegotiating tariffs with the EU is a lower priority right now than the low-hanging fruit offered by countries such as India and other nations such as Vietnam.”
In reaction to audience questions about low levels of qualified US workers to fill a likely surge in US manufacturing jobs, Nitakhtar said she does not believe that the existing USMCA free trade agreement with Canada and Mexico will go away as a result of continued 25 percent tariffs on the US’ two largest trading partners.
“We expect the US to renegotiate the USMCA by July of 2026, possibly earlier” she said. USMCA is also important, she said, because at current, “the US needs their people to staff expected growth within the US manufacturing industry.”
“In the meantime, we expect the US to increase their trained manufacturing workforce through various university programs, workforce education, investor education programs, as well as through executive orders used as a signaling tool,” she said.
“Once the (manufacturing) industry is stronger, I would expect to see measures put in place to ensure that the industry remains protected.”