U.S. Tariffs on Imported Steel and Aluminum to Increase by Fifty Percent Wednesday

What Happened?

Per an executive order from President Trump, tariffs in the U.S. on imported steel and aluminum are set to increase by fifty percent on Wednesday. President Trump issued a statement about the tariff increases, saying they would ‘reduce or eliminate the national security threat posed by imports of steel and aluminum articles and their derivative articles.’

The new tariffs will take effect on June 4^th, 2025. The Trump Administration claims the new tariffs will increase jobs and domestic manufacturing production in the United States.

Why it Matters

Steel and aluminum are used in a wide range of products, meaning the increase in their costs will likely have a ripple effect across the U.S. economy. Some economists have argued the increased tariffs will have the exact opposite effect to the one promised by the Trump Administration.

Gary Clyde Hufbauer, a senior fellow at the Peterson Institute for International Economics, told the Washington Post that ‘steel is used throughout the economy, so you’re talking higher prices and lost jobs across the U.S. manufacturing industry.’ According to the National Association of Manufacturers, manufacturing employment dropped in April by roughly one thousand jobs, leaving about thirteen million manufacturing jobs in the U.S.

National Association of Manufacturers data indicates most manufacturing firms are small, meaning less than 500 employees. Rick Heuther, CEO of Independent Can in Baltimore, said of the recent tariffs, ‘We’ve absorbed a fair amount of these costs, but we can’t absorb any more.’ Which means those increased costs will be passed on to consumers in the form of higher prices.

James Farley, CEO of Ford Motor Company, told the associated press the new tariffs would cause cost and chaos into automobile manufacturing in the United States. Car manufacturers are one of the biggest users of steel, and the United States imports more steel than any other country. But it mostly imports steel from U.S. allies like South Korea, Japan, Germany and Canada which means the tariffs increases will be felt most keenly by countries the U.S. considers to be friends.

The U.S. is still the fourth largest manufacturer of steel in the world, and prior to the 1970s it was number one. China is currently the world’s largest manufacturer of steel, owing in large part to massive industrialization which has been ongoing for the past two decades. China overproduces steel which is then exports to foreign markets like the United States. 

The new tariffs may indeed help certain segments of the steel industry in the United States, but the overall impact remains to be seen. 

How it Affects You

American consumers will likely see price increases in a range of products containing steel and aluminum, which is everything from tin cans to cars. How long the new tariffs on steel and aluminum remain in effect is an open question, since in the past several months the Trump Administration has imposed then reversed, or paused, other tariff increases several times.