U.S. Imposes 50% Tariffs on UK Metals, Jeopardizing Economic Prosperity Deal

(UNITED STATES) — President Donald Trump signed an executive order on June 3, 2025, doubling tariffs on steel and aluminum imports to 50% from 25%, broadening a trade action that took effect on June 4, 2025, under Section 232 of the Trade Expansion Act of 1962.

The order applies the 50% tariffs to imports from every country except the United Kingdom, which received an exemption under the May 8, 2025, US-UK Economic Prosperity Deal. The order also allows for potential adjustments on July 9, 2025, if the terms of that deal are not met.

Trump’s move widens duties that his administration had already imposed in March 2025 and extends them beyond raw metals to derivative products containing steel and aluminum. BCG estimated the expanded action would add $50 billion in total costs, doubling the effect of the earlier 25% levies.

The White House framed the step as a national security measure. The executive order said low-priced excess imports continued to threaten U.S. steel and aluminum producers by undercutting their competitiveness, and it said the March tariffs had provided price support but had not delivered enough domestic capacity utilization for national defense needs.

That makes the latest increase more than a simple rate change. It ties a sharper tariff level to the same Section 232 authority the administration used to justify the earlier measures, while carving out one negotiated exception through the US-UK Economic Prosperity Deal.

Coverage stretches across a wider range of goods than steel coil or aluminum sheet. Derivative products containing those metals also fall under the policy, though the structure varies by how much metal they contain and how they were made.

Goods with less than 15% total metal content are effectively exempted. “Substantially made” derivatives face a 25% rate, products using only U.S. metals abroad face a 10% rate, and metal-intensive industrial and electrical grid equipment face a 15% tariff through 2027.

Copper imports also face 50% tariffs, above the 25% rate markets had expected. That jump sent New York copper futures up 25% to a record and added pressure to global benchmarks.

Analysts said the copper decision could hit U.S. manufacturers particularly hard because they rely heavily on imports. The rise in copper duties puts another industrial input into the same higher-cost environment already forming around steel and aluminum.

Price moves had already appeared before the June doubling. From Feb 7 to May 23, U.S. steel prices rose 77% versus the European Union, while aluminum prices rose 139% from Feb 7 to May 27.

Those shifts coincided with new investment announcements inside the United States. Emirates Global Aluminum said it was building a facility, and Hyundai Steel and Posco announced a joint steel plant in Louisiana.

The administration has presented those investments as evidence that higher import barriers can support domestic production. At the same time, the widening price gap with Europe points to how quickly tariff protection can feed through into the U.S. market.

Janice Lee, BCG metals co-lead, said doubling tariffs will pass more costs to supply chains, building on earlier price and investment changes. Her assessment linked the new order to effects already visible since the March 2025 duties, rather than treating the June increase as an isolated step.

That cost pressure matters because the tariffs do not stop at mill products. They reach finished and semi-finished goods that use steel, aluminum or copper, meaning manufacturers farther down the chain can face higher input costs even if they do not import primary metal directly.

Iacob Koch-Weser, BCG trade and geopolitics expert, said the escalation adds complexity and puts more weight on country-specific exemptions reached through negotiation. His view reflected the way the UK carve-out now sits alongside broad tariffs on other trading partners.

A senior Trump official said the changes simplify the policy for fairness and downplayed effects on consumer prices. That position suggests the administration sees a cleaner tariff schedule, with fewer distinctions among suppliers, as easier to defend politically and operationally.

Even with that argument, the tariff map remains layered. Different rates now apply depending on content, manufacturing method and product category, while one major partner retains an exemption tied to a separate bilateral arrangement.

The UK exemption stands out because it rests on a named agreement and a future review date. Under the May 8, 2025, US-UK Economic Prosperity Deal, British goods avoid the higher tariffs for now, but the order leaves open changes on July 9, 2025, if the deal’s terms are unmet.

For other suppliers, the increase is immediate and broad. Canada, the European Union, Mexico and South Korea are among the partners affected by the wider trade agenda that Trump has pursued in his second term.

The administration has tied that agenda to concerns about Chinese overcapacity, even when the direct tariff hit falls on allied or neighboring economies. That approach reflects a strategy in which Washington uses across-the-board trade tools to counter what it sees as global distortions tied to excess production.

Those measures sit beside other trade fights already underway. Reciprocal tariffs and related trade actions face separate appeals at the Court of International Trade, adding a legal track to the policy battle over Trump’s tariff program.

That means businesses are dealing with two moving parts at once. One is the direct commercial effect of higher duties on imported metals and metal-containing goods; the other is the legal and diplomatic uncertainty around how long the current structure will remain in place.

BCG projected near-term cost pass-through and supply chain reshoring. In practice, that points to a period in which companies first absorb or pass along higher prices, then adjust sourcing and investment decisions over time.

The March-to-May price data already suggest the first part of that process was underway before the tariffs doubled. Steel and aluminum prices in the United States had moved sharply higher relative to Europe, and the June order raises the prospect of another round of adjustment.

Copper adds a different layer because it is so widely used across manufacturing. A 50% tariff on copper imports, combined with the record jump in New York futures, raises pressure on firms that depend on imported supply for equipment, wiring and other industrial uses.

The derivative rules also matter for producers that may not think of themselves as metal importers. A company buying a finished component can still be exposed if that product falls within the steel, aluminum or copper tariff framework.

Some categories received relief through lower rates or effective exemption. Goods with less than 15% total metal content do not face the same treatment as metal-heavy products, while products using only U.S. metals abroad face 10% and metal-intensive industrial and electrical grid equipment face 15% through 2027.

Still, many steel, aluminum and copper products remain at the 50% level after the restructuring. That balance suggests the administration wanted to preserve the headline force of the action while narrowing some of the more complicated edges.

Lee’s view that costs will move through supply chains captures the likely pressure points. Importers pay the tariff first, but manufacturers, contractors and buyers farther along the chain often feel the effect as prices reset.

Koch-Weser’s emphasis on negotiation also points to how the policy could develop. The UK exemption shows one route, with country-specific deals shaping access to the U.S. market even as the wider tariff wall stays in place.

For now, the United States has moved decisively toward higher barriers on industrial metals. Trump’s June 3, 2025, order pushed steel and aluminum tariffs to 50%, swept in derivative products, added copper at the same rate, and left allies and rivals alike to contend with a trade policy built around Section 232, selective exemptions and a growing bill for U.S. supply chains.