Preserved foods, cars, houses and a range of other goods could soon become more expensive because companies face a newly doubled rate rate of 50% for imports of steel and aluminum.
President Donald Trump described the increase, which recorded the rate of 25% announced in February from Wednesday, as an effort to “secure the steel industry in the United States more” during a rally of Friday in a Pittsburgh Acirial, Penn.
But while American steel industry groups praised the tariff hike, economic experts have sounded alarms, saying that it could further disrupt the already volatile global supply chain and put more pressure on the companies and portfolios of the Americans.
“Consumers will have to pay the price,” said David Beiri, Virginia Tech economics teacher. “The continuous uncertainty created by the government poisons business plans.”
How will the price increases in steel and aluminum have an impact on businesses?
The United States strongly depends on imports of steel, bringing more materials from abroad than any other country in the world, according to the International Trade Administration. More than 26 million metric tonnes of steel was imported last year, most of which came from Brazil, Canada, Mexico, South Korea and China.
“We also depend on aluminum,” explains Jonathan Colehower, managing director of the Consulting company UST.
The national steel industry has expressed support for increased prices, saying that they will help resist increased competition from foreign steel manufacturers. “Chinese steel exports to the world have more than doubled since 2020, going to 118 million people in 2024 – more than the total production of North American steel,” said American Iron and Steel Institute, one of the many professional associations representing the American steel industry in a statement after Trump announced the higher rate. “This tariff action will help prevent new overvoltages in imports that would injure American steel producers and workers.”
But experts are concerned about the ability of the industry to meet increased demand as a business, faced with additional import costs, are looking for cheaper alternatives for their products. While the United States dominated the steel industry, the boom died in the last century. “With the inner capacity, he cannot necessarily produce what we could need … There will be a transitional effect,” explains Beiri, referring to the adjustment period that the steel industry must navigate as the supply chain changes.
Colehower claims that the interior steel offer can be tightened following the increase in prices, which could lead to an increase in internal prices in the middle of high demand. “There is absolutely no way that it can be able to make the difference immediately,” he said about the national steel industry.
The association aluminum, a commercial group which represents both American and foreign companies, said that it supported Canadian aluminum without a price, pointing to the dependence of American aluminum industry towards the neighbor of the north of the country. “Aluminum is a critical material for our economy and national defense – used in everything, from cars to hunting drinking cans. Today, the United States invests considerably and will need aluminum that is both melted and recycled to meet growing demand,” said the association. “Over the years, if not decades, it will be necessary to strengthen the capacity of American fusion, our metal needs must be met in importation.”
How will higher prices have an impact on goods prices?
Steel and aluminum are used in various products, car cans and automotive office supplies – all prices are likely to increase due to dubbed import taxes.
The Institute of Can CAN manufacturers, the professional association of the manufacturing industry of the metal box, has opposed the increase in prices in a press release after Trump announced the future change in the rate, claiming that it “would further increase the cost of canned grocery stores”. The manufacturing industry can import almost 80% of its tin mill in foreign countries.
“The doubling of steel prices will inflate the prices of inner canned food, and he plays in the hands of China and other producers of foreign food, who are more than happy to undermine American farmers and food producers,” said the professional association.
Beer companies and other drinking companies should also be assigned.
The real estate and construction industries, which both use steel to build houses, warehouses and other structures will also be more important, says Colehower. He predicts companies such as Lowe’s and Home Depot, the latter, who promised before the price hike increased the cost of his goods, will be seriously affected. Agricultural equipment and transport vehicles, including cars, bikes and others, will also cost more after the new rate rate, says Colehower.
Some companies may seek to adjust their commercial models in the face of increasing costs. CEO of Coca-Cola, James Quincey, for example, said in February that the company would plan to make more drinks in plastic bottles to compensate for aluminum price increases under the prices announced this month.
Prices negotiations are continuing between the United States and its business partners, many of which have expressed anger at the increase in import taxes.
Bea Bruske, president of the Canadian Labor Congress, described the steel prices of “direct attack on Canadian workers”. On Friday, an official of the European Commission said that the decision “adds additional uncertainty to the global economy and increases costs for consumers and businesses on both sides of the Atlantic”.
The United Kingdom has been spared the tariff hike; Mexico announced Wednesday that it planned to request a similar exemption.
Canada, Mexico and the European Union were previously exempt from steel and aluminum prices that Trump imposed during its first mandate in 2016, but are subject to current samples.
