US President Donald Trump told a meeting of US industry officials at the White House that he will impose tariffs of 25 per cent on steel imports and 10 per cent on imported aluminium next week.

Mr Trump vowed to rebuild American steel and aluminium industries, saying they had been treated unfairly by other countries for decades.

The Australian reports that more than $170 million of Australian steel and aluminium exports to the US could be at stake, largely through Melbourne-based company BlueScope Steel, which is the sole exporter of Australian steel to the US.

The move is likely to increase tensions with China, whose top trade official Lui He is in Washington for trade talks.

An early morning tweet from Trump that said the steel and aluminium sectors needed protecting from unfair trade drove shares in domestic industries sharply higher but by contrast, industrial stocks such as Boeing fell, with traders citing tariffs which would hit manufacturers.

The Dow Jones Industrial Average is down 500 points, or 2 per cent, so far on the news.

The German Steel Association attacked the plan, saying it violates World Trade Organisation rules.

Canada’s trade minister said any US tariff imposed on Canadian steel, the biggest foreign supplier of US steel, would be “unacceptable”.

The administration says duties would protect US industry, but critics say they would raise costs for industry and fail to deliver on a campaign pledge to boost domestic jobs.

Mr Trump tweeted on Thursday that American steel and aluminium companies needed “free, fair and smart trade”.

Mr Trump has indicated he favours a duty of 24 per cent on steel imports.

The administration has also cited national security interests for its action, saying the USS needs domestic supply for its tanks and warships.

The Department of Defence has recommended targeted steel tariffs and a delay in aluminium duties.

Although China only accounts for two per cent of US steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.

China has indicated it could retaliate against US steel tariffs by targeting imports of US agricultural commodities, such as soybeans of which America is the largest supplier.

While American steelmakers have lost three quarters of their jobs between 1962 and 2005, a major study by the American Economic Association showed that much of this had been due to improved production technology as output per worker rose fivefold.

“Thus, even if trade protection leads to increased domestic production, increases in employment may be far less than many hope,” a report from the highly-regarded independent Econofact economist network said last week.

Consumers of steel and aluminium have lobbied hard against the tariffs.

Econofact said in its report that two million jobs were in industries that use steel “intensively”, including car parts, household appliances, farm machinery and oil equipment.

Jobs in the consuming industries are concentrated in California, Texas, the Northeastern and Middle Western states that comprise the rust belt and states in the Southeast.

“Across many states, the number of jobs adversely affected in these steel-using industries could far exceed any steel jobs saved,” Econofact warned. “Past experience also shows that unilateral action like Section 232 tariffs will invite retaliation — the Bush-era steel tariffs led many countries to target politically sensitive US exports like Florida oranges and North Carolina textiles.”