By Gavin Bade

The White House granted a temporary reprieve for many of its tariffs on Canada and Mexico last week, but a similar pause seems less likely for revamped global steel and aluminum tariffs set to go into effect Wednesday.

President Trump's team has repeatedly said there would be no exceptions or exemptions from the 25% tariffs on steel and aluminum. In internal discussions and conversations with industry and labor groups, the administration appears to be sticking to that line, at least for now, say people familiar with conversations.

"I've seen him do steel and aluminum tariffs before, so I have no reason to not expect that will take place," said Sen. Bill Hagerty (R., Tenn.), a close Trump ally who served as ambassador to Japan during his first term.

The tariff move this week would increase levies on aluminum and tighten loopholes for existing tariffs. Trump imposed 25% tariffs on steel and 10% tariffs on aluminum in 2018. During his first term, and subsequently under the Biden administration, the U.S. negotiated exclusions and duty-free quotas for allied nations -- including Argentina, Australia, Brazil, Canada, Mexico, Japan, South Korea, Ukraine, the EU, and the U.K. -- as well as a litany of individual companies that received exemptions for specific products.

Last month, Trump issued a proclamation increasing the aluminum tariffs from 10% to 25%, effective March 12. He directed the Commerce secretary to end all exemptions to the steel and aluminum levies on that date, and prohibited new ones. He also ordered Commerce to widen the scope of steel and aluminum products covered by the tariffs.

Many nations have lobbied for their exemptions to continue despite the administration's insistence that none would be granted, including Japan, Australia and the European Union members. Mexico also sent a delegation to Washington on Monday for meetings on the tariffs, and Canada has been discussing the issue with Trump's team.

Automakers and metals companies like Alcoa with footprints in multiple countries have also sought carve-outs or delays from the Trump administration, according to people with knowledge of the requests. The CEO of Pittsburgh-based Alcoa, which produces aluminum in Canada, Australia, Iceland and other countries, told an industry conference last month that the 25% tariffs could threaten 100,000 jobs in the U.S. that rely on aluminum supplies, particularly from Canada, that cannot currently be sourced domestically.

Publicly, the administration has been steadfast that it will not allow for any carve-outs this time. Tariff exemptions, the White House wrote in its proclamation, "inadvertently created loopholes" that allowed Chinese-made steel to flow through those countries and into the U.S. duty-free.

U.S.-based steel and aluminum companies have reiterated that argument, as have protectionist advocacy groups close to the White House. A report from the Coalition for a Prosperous America, which advises the Trump administration on trade, argues that exemptions to the first-term steel and aluminum tariffs have dramatically undercut their effectiveness.

U.S. steelmakers and aluminum companies have pushed the study to the White House, along with an increase in public pressure. Last week, CEOs from eight U.S. steel companies, including U.S. Steel and Cleveland Cliffs, sent a letter to Trump urging him "to resist any requests for exceptions or exclusions and to continue standing strong on behalf of American steel."

The tariffs are set to be enacted under Section 232 of the Trade Expansion of 1962, which allows tariffs on products deemed essential to national security. They are expected to be effective immediately -- rather than initiating a new probe, the White House plans to impose them under the tariff investigation it conducted in its first term.

The tariffs also are expected to be written broadly, covering not just primary steel and aluminum but products that contain it, said people familiar with discussions. That could dramatically increase the number of metal products affected by the tariffs, potentially driving prices higher for a litany of metal goods in the U.S.

Still, Trump has left himself some wiggle room for carve-outs despite the administration's insistence otherwise. In early February, the president told reporters he would consider exempting Australia from the metals tariffs after a call with Prime Minister Anthony Albanese, though people with knowledge of policy planning say a carve-out is now unlikely.

The administration's recent reversal on its Canada and Mexico tariffs -- exempting goods compliant with the North American free trade deal two days after imposing the tariffs -- is also leaving some room for skepticism on Capitol Hill about what the ultimate policy will be.

"The White House has shown itself to be adaptable on this tariff issue," said Sen. Josh Hawley (R., Mo.), "so, there may well be some sort of [exemption] process. I don't know, so let's just see."

Write to Gavin Bade at gavin.bade@wsj.com

(END) Dow Jones Newswires

March 11, 2025 05:00 ET (09:00 GMT)

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