President Donald Trump signed an executive order on Feb. 10 that imposes 25% tariffs on all steel and aluminum imports, including from Canada and Mexico.

Trump first shared the news with reporters on Feb. 9 aboard Air Force One en route to attending Super Bowl XIL in New Orleans, telling them he’d announce the order a day later.

Feb. 27 MDM Webcast: Tariff Watch – Implications and Strategies for Distributors

The new order effectively raises the tariff rate on aluminum imports to 25% from the previous 10% imposed in 2018 during Trump’s first term as president. Meanwhile, the order reinstates a 25% tariff on steel and aluminum imports that were entering the U.S. as duty-free under a variety of exemptions.

The new order includes a provision that requires steel imports to be “melted and poured” and for aluminum to be “smelted and cast” within North America in a measure aimed at curbing imports of minimally processed Chinese steel, White House officials told reporters.

Canada is the United States’ largest steel supplier, ahead of Brazil, Mexico, South Korea and Vietnam.

On Feb. 9, Trump also told reporters that he would impose “reciprocal tariffs” that would add import duties on products from countries that had likewise added their own tariffs against the U.S.

Overall, distributors seem to have mixed feelings about the impact of the new administration on demand and profit margins. Several distributors who responded to our 4Q24 Baird-MDM Distribution Survey commented that they anticipate higher input costs due to tariffs on steel (and other imported goods), which could compress margins. Others see a potential benefit for domestic manufacturing.

Read more on what distributors have to say about Trump’s tariffs and its impact on demand and margins on MDM Premium.