U.S. doubles tariffs on steel and aluminum

Summary

Marketplace Morning Report: U.S. Doubles Tariffs on Steel and Aluminum Release Date: June 4, 2025

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Introduction

In this episode of the Marketplace Morning Report, hosted by David Brancaccio, the focus is on the United States' recent decision to double tariffs on steel and aluminum imports. The discussion delves into the immediate impacts of this policy change, the unique exemption granted to Britain, the broader implications for the European Union (EU), the economic repercussions reflected in employment data, and unexpected consequences in the arts sector due to federal funding cuts.

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U.S. Tariffs on Steel and Aluminum

At [01:33], David Brancaccio announces that the U.S. has doubled tariffs on steel and aluminum imports, setting the border tax at 50%. This significant increase is part of the White House's strategic move to protect domestic industries from foreign competition.

David Brancaccio [01:33]: "The planet Earth got US tariffs on metals today, but Britain gets an asterisk."

Britain’s Exemption: A Closer Look

Britain has been granted an exemption from these new tariffs, a decision rooted in a bilateral agreement signed between the U.S. and the UK in May. Leanna Byrne from the BBC provides insight into this exemption.

Leanna Byrne [01:57]: "Yes, David, the UK seems to have avoided this one for now. So this exemption hinges on a bilateral agreement that the US and the UK signed back in May."

However, Byrne cautions that the exemption is not finalized. British steelmakers like Rowan Crozier, who runs a metal stamping firm in Birmingham, express frustration over the ongoing uncertainty.

Leanna Byrne [02:30]: "Rowan Crozier told me the uncertainty is making planning a nightmare."

Rowan Crozier [02:30]: Implied frustration with planning uncertainties due to potential tariffs.

Impact on British Businesses

The uncertainty surrounding the tariff exemption has left British businesses in a precarious position. With materials like steel subject to long lead times, delayed orders stemming from unclear tariff statuses have disrupted production schedules, creating chaos within manufacturing operations.

European Union's Response and Potential Trade War

The EU has not been spared from these escalating trade tensions. David Brancaccio highlights ongoing efforts to mitigate a broader trade conflict.

David Brancaccio [02:48]: "And post Brexit, Britain is not to be confused with the rest of Europe."

The EU's Trade Commissioner is actively engaging with U.S. negotiators in Paris to prevent the tariffs from expanding beyond steel and aluminum. Nevertheless, there is a looming threat of retaliatory measures if talks fail.

Leanna Byrne [02:55]: "If talks collapse, tariffs could rise across a huge range of EU exports."

Economic Implications: Weak Employment Data

Amidst rising tariffs, the U.S. economy shows signs of strain, illustrated by the latest ADP payroll report indicating the weakest job growth in two years.

David Brancaccio [03:17]: "The ADP payroll company's monthly jobs report out today was the weakest in two years, with just 37,000 more people getting paychecks in May. That is a third of what was forecast."

Susan Schmidt, a portfolio manager at Exchange Capital Resources, explains how tariff-induced uncertainty is hindering business decisions on employment.

Susan Schmidt [04:02]: "When you have an uncertainty like a tariff impacting the profitability of your business, CEOs are sitting back and waiting. They're not sure what to do with the level of employment at their company."

This hesitancy among business leaders is contributing to stagnant job growth, as companies postpone hiring until there is greater clarity on tariff policies.

Unexpected Consequences: Arts Organizations Facing Funding Cuts

Beyond the immediate economic sectors, federal policies are also impacting the arts. Arts organizations are receiving notifications that previously awarded grants from the National Endowment for the Arts (NEA) are being terminated under the claim that they "no longer effectuate agency priorities."

David Brancaccio [04:50]: "Arts organizations around the country have started receiving letters telling them that grants they had already been awarded from the National Endowment for the Arts were being terminated because they, quote, no longer effectuate agency priorities."

One such affected entity is the Brooklyn Conservatory of Music, which relies heavily on NEA funding to support its community programs.

Dorothy Savage [06:52]: "This puts tremendous pressure on our programs. We're going to do all we can. We're asking our other funders and colleagues and families and all our supporters to help us."

Despite an initial surge in private donations, the conservatory faces long-term challenges as private funders are hesitant to commit without the stability that federal funding provided.

Chad Cooper [07:23]: "There are few private funders willing to take chances like the federal government has."

Community Impact: Personal Stories from the Conservatory

The episode features heartfelt stories from the Brooklyn Conservatory of Music. Mila Suarez, an 11-year-old percussionist, and her mother, Anklen Suarez, highlight the critical role of arts education in their lives.

Anklen Suarez [06:09]: "No cost from the get go... it was like a no brainer."

Anklen Suarez [07:44]: "It's crucial for, you know, development of our kids, for their emotional health... a self expression."

Mila expresses her passion for music and the solace it provides her, emphasizing the program's importance.

Mila Suarez [07:57]: "Whenever you're playing like your hardest, you forget that there's anything else in the world and it's just really fun and you don't have to worry."

Conclusion

The U.S. decision to double tariffs on steel and aluminum imports has far-reaching consequences beyond the immediate economic sectors. While Britain temporarily avoids the full brunt of these tariffs due to a bilateral agreement, uncertainty persists, affecting both British and European businesses. Domestically, weakened job growth reflects broader economic apprehensions, while unexpected sectors like the arts face funding challenges that threaten community programs. As the situation unfolds, stakeholders across various industries are navigating a landscape marked by uncertainty and the need for strategic adaptation.

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This summary is based on the episode transcript provided and aims to capture the key discussions, insights, and impacts discussed during the broadcast.

Transcript

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[David Brancaccio]

The planet Earth got US tariffs on metals today, but Britain gets an asterisk. I'm David Brancaccio in Los Angeles. The White House triggered the doubling in tariffs on steel and aluminum imports. As of today, the tax at the border is now 50%. But one trading partner got an exemption. It's Britain. The BBC's Leanna Byrne joins us now from the UK. London gets a pass.

[Leanna Byrne]

Yes, David, the UK seems to have avoided this one for now. So this exemption hinges on a bilateral agreement that the US and the UK signed back in May. And that deal would remove sector specific tariffs altogether. So given the news today, you might think that this is a big relief for UK exporters. But the thing is, it's not a done deal yet. And UK Steel makers are still facing duties for now. Also, if the pact falls through, their products could still get hit with that full 50% tariff.

[David Brancaccio]

So what are we hearing from British businesses?

[Leanna Byrne]

Well, there's frustration. I spoke to Rowan Crozier who runs a metal stamping firm in Birmingham, and he told me the uncertainty is making planning a nightmare. Materials like steel have long lead times and if customers delay orders because they're unsure about tariffs, it throws production into chaos.

[David Brancaccio]

All right, but no doubling of tariffs today. And post Brexit, Britain is not to be confused with the rest of Europe.

[Leanna Byrne]

No, the European Union hasn't been spared and tensions are still really high. Right now, the EU's trade commissioner is meeting a top US negotiator in Paris to try and avoid a wider trade war. But if talks collapse, tariffs could rise across a huge range of EU exports. And the EU is already preparing retaliatory measures.

[David Brancaccio]

Leanna Byrne, Marketplace BBC thank you. Today's also a deadline of sorts when the White House is expecting countries to submit their best and final offers for how they they propose handling trade with the U.S. in return, trading partners will soon expect a letter from the US outlining tariffs and quotas. That will apply starting next month. July 8th is when President Trump's 90 day pause on tariffs is set to end. The ADP payroll company's monthly jobs report out today was the weakest in two years, with just 37,000 more people getting paychecks in May. That is a third of what was forecast. Some of this is the question, are tariffs on or off and if on how high and when? Susan Schmidt is portfolio manager at Exchange Capital Resources.

[Susan Schmidt]

When you have an uncertainty like a tariff impacting the profitability of your business, CEOs are sitting back and waiting. They're not sure what to do with the level of employment at their company. Employees are cost. And while they're waiting for this to settle down and be definitively decided, they've decided they're not going to take on new staff. We're seeing that in these employment numbers and I expect this to continue until we get more certainty in the market.

[David Brancaccio]

Arts organizations around the country have started receiving letters telling them that grants they had already been awarded from the National Endowment for the Arts were being terminated because they, quote, no longer effectuate agency priorities. Receiving that synthetic language are real organizations. One seeing its federal funding cut is the Brooklyn Conservatory of Music marketplaces.

[Samantha Fields]

Samantha Fields reports one Saturday every spring you can wander around the Park Slope neighborhood of Brooklyn and hear live music everywhere for free. Jazz groups playing on brownstone stoops, drummers playing in gardens, and elementary and middle school kids playing trumpets, flutes and drums outside the Brooklyn Conservatory of Music, the local nonprofit that puts on this open stages event. Mila Suarez is on percussion there. She's 11 and lives in Brooklyn.

[Mila Suarez]

I didn't get as nervous because we always have concerts at the end of every semester. It was just really nice because I got to do what I love in front of a lot of people.

[Samantha Fields]

Suarez takes both percussion and guitar lessons at the conservatory's community music center in her neighborhood. Her mom, unclen Suarez, signed her up three years ago as soon as she learned the center would be offering lessons to low income families at little to.

[Anklen Suarez]

No cost from the get go. I mean, I didn't ask my kids out, you know, otherwise we wouldn't be able to be honest with you to afford, you know, the type of music education that they were providing. And it was like a no brainer.

[Samantha Fields]

When Suarez was a kid in the Dominican Republic, she didn't have any kind of music education.

[Anklen Suarez]

And so, you know, though I listen to music and I like music, I never had access to it. So that was something that I wanted to provide for my kids.

[Samantha Fields]

The community music center and the heavily subsidized lessons it offers have been funded in part by a $50,000 grant from the National Endowment for the Arts. The conservatory had been hoping and expecting to have that money doubled this year. Instead, director Dorothy Savage says, it was all pulled.

[Zoe Saldana]

This puts tremendous pressure on our programs. We're going to do all we can. We're going to find a way. We're asking our other funders and colleagues and families and all our supporters to help us.

[Samantha Fields]

So far, she says, the outpouring of support has been huge. But even if private donors are able to bridge the gap for now, Chad Cooper, the conservatory's executive director, says there are few private funders willing to take chances like the federal government has. When a brand new program got a grant from the National Endowment for the.

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[Samantha Fields]

In the absence of federal funding, Anklen Suarez is concerned about the future of arts education in low income communities like hers.

[Anklen Suarez]

It's crucial for, you know, development of our kids, for their emotional health. What they get from it is not only discipline, it's a sense of community, it's a sense of peace. Within themselves. You know, it's a self expression to.

[Mila Suarez]

Get away from reality, a way to.

[Samantha Fields]

Get away from reality. Mila says.

[Mila Suarez]

Whenever you're playing like your hardest, you forget that there's anything else in the world and it's just really fun and you don't have to worry.

[Samantha Fields]

At 11, she already knows she wants to keep playing music for a long time. I'm Samantha Fields for Marketplace and in.

[David Brancaccio]

Los Angeles, I'm David Brancaccio. This is the Marketplace morning reports from APM American Public Media.

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