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1. The world under pressure: the global impact of Trump’s tariffs 
2. Economic verdict: the price of US policies 

Last week, President Donald Trump’s tariff increase from 25% to 50% on steel and aluminium imports came into effect as part of his strategy to strengthen and promote the US automotive and manufacturing industries. 

According to US Secretary of Commerce Howard Lutnick, President Donald Trump will sign an executive order partially exempting US car manufacturers from the 25% tariffs in order to give them time ‘to repatriate their supply chains’. Lutnick described the measure as a major victory for the president’s trade policy, rewarding companies that produce domestically and offering leeway to those planning to invest and expand production in the United States. He also defended the increase in tariffs on steel and aluminium, arguing that they are necessary for national security reasons, as ‘you cannot fight a war without producing those materials yourself’. During his testimony before the Senate Appropriations Committee, he denied that the tariffs would have an immediate negative impact on the industry, emphasising that Trump’s goal is to encourage the return of manufacturing by raising the cost of foreign products. He also announced that manufacturers would receive credits of up to 15% of the value of vehicles assembled in the country, applicable to the cost of imported parts. 

The world under pressure: the global impact of Trump’s tariffs 

Recent US trade measures have put South Korea in a delicate position, especially for manufacturers such as Hyundai and GM Korea. These companies, which are highly dependent on the US market, face increasing external risks as a result of this trade policy. In the case of Hyundai, the US market accounted for 54% of its total exports last year, so the implementation of this tariff puts a significant portion of its international revenue at risk. This situation has led the company to be cautious in the face of union demands for a bonus equivalent to 30% of net profits in 2024, as Hyundai’s priority is to strengthen its position in the face of the potential impacts of the new trade environment. For its part, GM Korea exports more than 80% of its domestic production to the United States, making it one of the companies most exposed to the consequences of the tariff. To improve its profitability, the company has sold some of its assets and has had to deal with speculation about a possible exit from the South Korean market, although the company has denied these rumours. In addition, its sales have declined, partly due to low domestic demand and international trade tensions. 

However, amid trade tensions, Donald Trump and South Korea’s new president, Lee Jae-myung, agreed to move quickly towards a tariff agreement that benefits both sides. The decision was made during their first phone call after Lee’s election, in which both committed to pushing forward technical negotiations that would yield concrete results. Both leaders highlighted the strategic importance of their relationship and plan to meet soon, possibly at the G-7 summit in Canada. 

In the Americas, the impact of new steel tariffs is beginning to slow economic development in industrial states in Mexico such as Guanajuato, Querétaro, San Luis Potosí and Nuevo León. According to local media, at least 35 automotive projects have been cancelled or put on hold, putting thousands of jobs at risk. Miguel Ojeda, secretary general of the Independent Mexican Workers’ Confederation, warned that this measure ‘complicates the operation of assembly plants, smelters and suppliers, many of which are considering leaving the country or halting their expansion.’ He also pointed out that higher costs are affecting the competitiveness of Mexican exports to the United States and that even Chinese companies have begun to withdraw investments due to the lack of stability. Added to this is the 2% drop in light vehicle production in May 2025, while exports fell 2.9% and domestic sales 0.4%, according to data from the National Institute of Statistics and Geography (INEGI). Similarly, the National Auto Parts Industry (INA) warned that the tariff increase from 25% to 50%, under Section 232, represents an estimated impact of $6.289 billion for the Mexican sector, since ‘59.54% of the steel and aluminium that the United States receives in auto parts comes from Mexico and Canada,’ with Mexico being the main supplier with almost 39%. 

Mexico, like South Korea, is seeking an agreement with the United States to reduce tariffs on steel and aluminium. Economy Secretary Marcelo Ebrard explained that, during a meeting with the US Secretary of Commerce, he proposed that Mexico receive similar treatment to the United Kingdom, which has already been exempted from these measures. He argued that ‘given the surplus that the United States maintains in its steel exports to Mexico, it makes no sense to apply such a high tariff.’ The goal, he said, is to eliminate it completely. He also reported on the holding of a new round of negotiations and that the final decision will be ‘political.’ 

In this regard, the tariff increase has proven to have a negative impact on almost all of the United States’ trading partners, with the exception of the United Kingdom (the only country that has reached a preliminary agreement during the current 90-day pause). Mexico and Canada, first and third in terms of steel exports to the United States, face the greatest consequences. However, both countries are in active negotiations to eliminate the tariffs. Meanwhile, in Europe, the European Union hopes to secure an exemption and has called emergency meetings, although no immediate retaliation is expected due to other ongoing trade disputes. The EU has already approved a package of tariffs worth 21 billion euros and is concerned about Chinese steel surpluses, which have hit its industry hard, causing job losses. 

Meanwhile, Trump defends his decision as a victory for American steel and aluminium workers. 

Economic verdict: the price of US policies 

According to US media, public confidence in the economy has declined for the fifth consecutive month. The Conference Board reported that its consumer confidence index fell 7.9 points in April to 86, the lowest level since May 2020. Nearly a third of consumers anticipate a slowdown in hiring in the coming months. These figures reflect growing pessimism among the US population, many of whom expect prices to rise as a result of their president’s new economic strategy. Reactions from US users were quick to appear on platform X: ‘In the United States, because of tariffs, prices are rising in Walmart stores and staff are being laid off’; ‘The tariffs are nonsense, while China laughs and circles around our economy‘; ’The effects of the tariffs mean that customers will pay more for the same product because of the tariff or will have to pay more for a similar product made in the United States, because the tariffs have made the alternative more expensive. In any case, people are buying less’. 

The increase in tariffs in the United States has created a scenario of uncertainty for companies in the automotive and industrial sectors, both inside and outside the country. Manufacturers in South Korea and Mexico face increased economic pressure, cancelled investments and the risk of job losses. While some companies are rethinking their presence in key markets, others are seeking government support or reducing operations. 

In the United States, consumer unease and fears of inflation reflect that the consequences of this policy could result in lower consumption and a less favourable environment for long-term industrial growth.