New York (AP) – U.S. President Donald Trump is hiking nearly all tariffs on foreign steel and aluminum, a move that could impact a range of businesses from automakers to home builders, with a potential increase in consumer prices.
Steel and aluminum sourced from abroad are essential for everyday items such as soup cans and paper clips, as well as stainless steel refrigerators and vehicles. Economists caution that these new tariffs could considerably strain the financial resources of both consumers and businesses.
This is what we know.
What is the current tariff rate for imported steel and aluminum?
Presently, imports of steel and aluminum are subjected to a 25% tax. This tax rate applies to both metals, following Trump’s decision to eliminate steel exemptions and increase aluminum tariffs on March 12. His prior import taxes for 2018 have now been activated.
That rate is likely to double. In a statement made Tuesday, Trump confirmed that the U.S. would begin taxing nearly all imports of steel and aluminum at 50% after an announcement made late on Wednesday. In contrast, UK steel and aluminum will continue to be taxed at 25% due to recent trade agreements.
Why is Trump increasing these tariffs?
Trump claims this initiative is aimed at safeguarding American industries. He reiterated this point on Friday, referring to a “strategic partnership” between U.S. steel and Japanese steel.
In his speech at Mont Valley Works in Steel, USA, at the Ilbin factory in the suburbs of Pittsburgh, Trump stated that the tariff increases “will protect more of the U.S. steel industry,” and he reiterated a similar message when discussing plans to raise tariffs on imported aluminum.
In his Tuesday declaration, Trump also stated that elevated tariffs would ensure that imported steel and aluminum “do not jeopardize national security.”
“I believe that raising tariffs will more effectively counteract foreign countries that continue to dump low-cost excess steel and aluminum into the U.S.,” he remarked in the statement.
How is the industry responding?
While some analysts have endorsed the tariffs that Trump has introduced to bolster domestic steel and aluminum production during his first term, many others have warned that the new taxes could hamper the industry’s ability to adapt.
Additionally, some organizations representing metalworkers assert that tariffs alone are not a sufficient solution to ensure the growth of U.S. manufacturing.
“Strategic tariff trials can serve as valuable tools for balancing the scale, but pursuing comprehensive reforms in the global trading system is absolutely necessary,” said David McCall, international chairman of the United Steelworkers Union, emphasizing the need for collaboration with trusted allies like Canada to “curb bad actors.”
Matt Meanan, Vice President of Foreign Affairs at the Aluminum Association, noted that the trade group “recognizes President Trump’s ongoing commitment to fortifying the U.S. aluminum industry,” but asserted that “tariffs alone will not significantly boost U.S. aluminum production.”
“Consistent and predictable trade and tariff policies are essential for planning current and future investments,” Meanan added.
What products might be affected by rising tariffs on steel and aluminum?
Various companies dependent on foreign steel and aluminum are beginning to feel the repercussions of Trump’s earlier tariffs. However, the upcoming increases could further elevate costs.
Steel and aluminum are utilized in various products, including appliances like washing machines and vehicles. Much of the automotive sector relies on global supply chains, and even those not purchasing new vehicles might find that repairs could require parts that utilize imported metals, thereby inflating overall maintenance and ownership expenses.
In grocery stores, these metals play a significant role. They are ubiquitous in packaging for many food items like canned tuna, soups, and nuts. Experts warn that increasing import taxes on these materials may lead to higher grocery prices overall, putting additional stress on consumer budgets.
Additionally, aluminum and metal tariffs greatly impact the construction and transportation sectors, as many crucial building components and materials are made from these metals. Economists lament that more spillover effects may occur as well. Even products not directly packaged in steel or aluminum can have elevated costs related to shipping and storage. For instance, the truck used for transport adds to the overall expenses borne by the consumer.
If foreign competition diminishes due to these new tariffs, U.S. steel and aluminum producers may also find it easier to hike their prices. Consequently, even businesses that do not procure these foreign metals may end up paying more.
Iron prices have already surged by 16% since Trump’s inauguration in mid-January, according to the government’s producer price index. As of March 2025, steel prices were at $984 per U.S. metric ton, considerably higher than in Europe ($690) or China ($392), as reported by the U.S. Department of Commerce.
Are there any exceptions?
The newly established 50% tariff applies to nearly all steel and aluminum entering the U.S. from foreign countries. However, the UK, which recently finalized a significant trade agreement with the U.S., will be an exception.
The UK informed the U.S. as part of the trade agreement reached on May 8th. They agreed to reduce the existing 25% tariffs on British steel and aluminum to zero. Although the exemption is not yet active, in his Tuesday declaration, Trump acknowledged that implementing the deal was “necessary and appropriate,” and he would “apply different treatment to these metals from the UK.”
For now, UK steel and aluminum obligations will stay at 25%. However, if the U.S. government finds the UK non-compliant with the agreement, tariffs may be adjusted starting July 9.
Trump might be gearing up for further hikes on steel and aluminum tariffs affecting other nations, which could provoke retaliatory actions from other trading partners. For instance, in response to the earlier taxes on these metals, the European Union previously outlined potential countermeasures.
The 27-nation bloc had postponed these measures until July 14 to facilitate negotiations but stated on Monday that they are preparing a list of actions that will be initiated if trade discussions with the U.S. falter.
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London AP writers Jill Lawless, along with Josh Balk and Michelle Price from Washington, DC contributed to this report.
Source: apnews.com