25% tariffs on steel and aluminium

On 10 February 2025, Donald Trump signed 25% tariffs on all steel and aluminium imports, with no exceptions, due to take effect in March. The decision revived a familiar instrument but with a wider reach: it was not about protecting one sector against one particular country, but about taxing the entry of these metals into the United States across the board. A levy of this kind, with no exceptions by country, simplifies enforcement but widens the number of companies and trading relationships that are affected.

For European industry, and for Spanish industry, the news was direct: its exports of steel, aluminium and derived products to the US market were about to become more expensive at a stroke. In a sector with tight margins and heavy international competition, a barrier of that size can decide whether an order is kept, reduced or lost. And it is not only the tariff itself that counts but also the doubt about how long it will last, because the American buyer may look for another supplier if it does not know what its order will cost next month.

A measure without exceptions

Steel and aluminium are basic materials for construction, the automotive industry, machinery and packaging. They are found, as products or components, in an enormous variety of goods, so a levy on them ends up having an effect far from the steelworks and foundries.

Because the tariff applied to all imports with no exceptions, not even the traditional partners of the United States were left aside, and Europe was directly affected. That meant that belonging to an alliance or political closeness did not, in this case, bring different treatment, and that exporters of every origin competed at the same disadvantage against the product made at home.

Competitiveness at stake

European metal industry, including Spain’s, lost competitiveness in the United States. A 25% tariff makes the product more expensive for the American buyer and forces the manufacturer to choose between cutting its margin, losing sales or looking for other markets. None of the three options is free, and each company will respond differently depending on its cost structure. Anyone operating on very tight margins will have fewer options than someone with a differentiated product, long-term contracts or customers willing to share part of the cost.

The effect does not stop at the metal producer. Manufacturers that use steel or aluminium as an input, and those that export products that incorporate it, see their costs and their customers’ position change. Providers of industrial services, from transport to machining, may also notice a lower volume of orders.

The first step

Reviewing the exposure of each customer and product to tariffs was the first step. With that map it is possible to decide which contracts to renegotiate, which price-review clauses exist and which alternatives are available, from other destinations to changes in the composition of the product.

It is best done with figures rather than impressions: how much of the volume and margin depends on a single market, how long the company can withstand lower sales there and what would happen to financing if turnover suffered. An adviser can help to translate those scenarios into the cash-flow plan and into conversations with the banks. If the exposure is significant, it is also worth talking to customers before they come to you: an early conversation about prices and timing usually leaves more room than a renegotiation under pressure.

Before acting, you need to know how much of the business really depends on a single market.

This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.