The US is set to impose a 25% tax on steel and aluminum imports, ending exemptions for major trade partners like Canada, Mexico, Brazil, and the European Union. As announced by President Donald Trump, these expanded tariffs are expected to take effect next month, forcing many US businesses to pay more for imported metals.
But the added costs may not stop there. Companies could pass these expenses—or a portion of them—onto consumers. Since steel and aluminum are critical components in countless products, which items are most likely to see price hikes?
1.Canned Food, Beer, and Fizzy Drinks
Steel and aluminum are essential for producing cans, and the US relies heavily on imported steel for this purpose. According to the Can Manufacturers Institute (CMI), about 70% of the steel used to make food cans in the US is imported from countries like Germany, the Netherlands, and Canada.
When Trump first imposed steel tariffs in 2018, many can-makers secured exemptions. However, with steel production declining further and prices rising, the CMI warns that grocery prices for canned foods could increase. Robert Budway, president of the CMI, stated,
“While the president may believe these tariffs are protecting the steel industry, they certainly are undermining our food security and supply resiliency for American canned food.”
Aluminum tariffs also impact brewers and soda manufacturers like Coca-Cola, which have warned of higher costs and potential price increases for consumers. Coca-Cola CEO James Quincey acknowledged the challenges but expressed confidence in the company’s ability to adapt.
Despite Trump’s insistence that no exemptions will be granted this time around, some industries remain hopeful for a reversal.
2.Cars
The automotive industry is another major consumer of steel and aluminum. During Trump’s first term, carmakers like Ford and General Motors warned that tariffs would add approximately $1 billion to their costs. For consumers, this meant a 1% price increase, or about $300 per vehicle, according to Morningstar.
This time around, analysts predict similar cost increases for automakers. David Whiston of Morningstar noted that affordability pressures in a market still recovering from 2019 sales levels could limit how much of these costs are passed on to buyers. However, Michael Wall, an auto analyst at S&P Mobility, believes it’s “realistic” to expect some of the tariff costs to trickle down to consumers.
Ford CEO Jim Farley has criticized Trump’s recent moves, calling them a source of “a lot of cost and a lot of chaos” for the industry. If blanket tariffs on goods from Mexico and Canada are implemented, TD Economics estimates car prices could rise by as much as $3,000.
3. Construction, Housing, and Appliances
The construction industry is one of the largest consumers of steel, using it for everything from building frames to appliances. Carl Harris, chairman of the National Association of Home Builders (NAHB), warned that the tariffs run “totally counter” to Trump’s goal of making housing more affordable.
“Ultimately, consumers will pay for these tariffs in the form of higher home prices,” Harris said. The NAHB has urged the administration to exempt building materials from the tariffs to avoid deterring development and rebuilding efforts.
Appliance manufacturers are also feeling the pinch. In 2018, Whirlpool faced a $350 million cost increase due to rising steel prices. Companies unable to absorb such costs may pass them on to consumers through higher retail prices.
How Metal Tariffs Could Impact Everyday Americans
The expanded steel and aluminum tariffs could have far-reaching consequences for US consumers, driving up prices for everyday items like canned food, cars, and housing. While the administration aims to protect domestic industries, the ripple effects of these tariffs may undermine affordability and economic resilience in key sectors.
By understanding the potential impacts, consumers and businesses alike can better prepare for the changes ahead. For more updates on how tariffs and trade policies affect the economy, stay tuned to our news page.
