In a bold shift that could reshape U.S. trade dynamics, President Donald Trump declared on June 2, 2025, that tariffs on imported steel and aluminum would be doubled—from 25% to 50%—with immediate effect.. While the decision sent U.S. steel stocks soaring, it has ignited fierce political backlash and opened the door to possible legal disputes.
Cleveland-Cliffs Inc. emerged as the biggest winner on Wall Street, rallying 25% after the announcement. Other domestic steelmakers, including Nucor and Steel Dynamics, also registered notable gains, reflecting investor confidence in a potential revival of the U.S. steel sector.
However, reactions from lawmakers, trade experts, and business coalitions have been sharply divided. Proponents within the Republican party have applauded the move as “decisive and pro-American,” arguing that it secures domestic jobs and revitalizes legacy industries. But Democrats and centrist economists warn that the tariffs risk violating international trade rules under the World Trade Organization (WTO).
Senator Elizabeth Warren called the move “short-sighted,” stating:
“It may boost profits for a handful of steel executives in the short term, but it will hurt American consumers and workers across manufacturing-dependent industries.”
Meanwhile, advocacy groups such as the National Foreign Trade Council and the American Automotive Policy Council are reportedly exploring legal avenues to challenge the executive order, arguing it lacks appropriate economic justification and could provoke retaliatory measures from trade allies.
The European Commission has already hinted at countermeasures, stating it will “not hesitate to defend EU industries.” The EU’s previous tariff negotiations with Washington have stalled, and this latest escalation threatens to derail ongoing trade diplomacy.
From a governance perspective, analysts say the move may serve as a political litmus test ahead of the 2026 midterms, with trade and industrial policy becoming increasingly central to U.S. economic debates. Trump’s campaign team is framing the tariffs as a necessary correction to “unfair global trade,” aligning the measure with a broader “America First” platform.
However, legal experts note that implementing a 50% tariff without Congressional oversight could trigger constitutional questions, especially if industry groups sue under the Trade Expansion Act or Administrative Procedure Act.
As the policy takes hold, the full extent of its economic consequences—both domestically and globally—has yet to materialize. While the immediate effect has been a rally in steel stocks, industries relying heavily on imported steel — including auto, defense, and construction — now face rising material costs that could strain margins and consumer prices.
