Steel And aluminum are everywhere. Americans Lives are filled with these elements. Inside a stainless steel refrigerator sit aluminum soda cans. A stainless steel drum rotates within an aluminum washing machine. These are the same metals utilized in automobiles and aircrafts, smartphones and skillets, towering buildings and tiny zippers.
That's why President Donald Trump The 25% duties imposed on all steel and aluminum imports, implemented this Wednesday, might affect manufacturers and consumers extensively.
Below are various sectors and items that depend on aluminum and steel materials:
Construction
Approximately one-third of all U.S. steel shipments are utilized by the construction sector, making it the largest consumer of steel among industries as reported by the Council on Foreign Relations. This same industry relies heavily on an international supply network for constructing various infrastructures ranging from airports to educational institutions and roadways, notes the Associated Builders and Contractors, which represents over 23,000 member companies.
The group says some contractors were able to lock in prices on steel or aluminum ahead of the tariffs. But if they are prolonged, the import taxes will ultimately raise prices at a time when the construction industry is already struggling with higher costs for labor and materials. And uncertainty around the tariffs will make it less likely that companies will commit to big building projects, the group said.
Annie Mecias-Murphy is the co-owner and president of JA&M, a contractor for commercial buildings based in Pembroke Pines, Florida. Some of the main materials her company uses are rebar, or reinforced steel, and post-tension cables, which reinforce concrete after it's poured.
In efforts to stay ahead of the tariffs, we aim to secure our pricing and collaborate with our trading partners and clients on various strategies," stated Mecias-Murphy. "However, at the end of the day, increasing expenses pose challenges for small business proprietors such as myself when considering extensive long-term initiatives.
Steel cans
Tin mill steel is used for a wide variety of packaging, from soup cans to hairspray. And the U.S. currently imports 70% of its tin mill steel, according to the Can Manufacturers Institute.
The institute said the more limited tariffs Trump imposed in 2018 resulted in the closure of nine tin mill lines in the U.S. as manufacturers shifted to other types of steel or simply shut down. As a result, only three U.S. tin steel lines remain open.
Mick Beekhuizen, who serves as both the president and CEO of The Campbell Company, stated during a recent earnings call that his firm sources tin mill steel from Canada. He mentioned that despite collaborating with their suppliers to offset the effects of tariffs, they might have to increase prices.
The Consumer Brands Association, representing manufacturers of packaged foods, has asked the Trump administration to exclude aluminum and steel products from tariffs when these materials are not produced in sufficient amounts within the U.S. If this exemption isn't granted, consumers can expect their grocery bills to increase.
"We urge the Trump administration to acknowledge the distinct requirements of various U.S. manufacturing sectors," stated Tom Madrecki, vice president of supply chain resilience at the Consumer Brands Association.
Autos
Much of the steel and aluminum used by Ford, GM, and Stellantis already originates from within the United States, diminishing the immediate effect these companies would experience due to increased tariffs.
However, experts caution that tariffs could lead to price increases for the Big Three American automakers. To avoid potential shortages as demand rises, domestic steel and aluminum manufacturers may need to expand production capabilities; otherwise, these materials will become pricier, consequently raising car expenses.
An additional carmaker likely to be affected by the tariffs is Elon Musk’s Tesla. During a January earnings call, Tesla's Chief Financial Officer Vaibhav Taneja pointed out the ambiguity surrounding these tariffs.
"The introduction of tariffs, which seems highly probable, will affect our company’s operations and profit margins," Taneja stated.
This might severely impact an already inflation-concerned American car purchaser. According to Kelley Blue Book, the typical cost of a new vehicle stood at roughly $48,000 last month.
And as with the steel and aluminum tariffs of Trump's first term, automakers are likely to have to revisit their financial outlooks for the year as they brace for impact.
Appliances
Manufacturers and vendors of items such as microwaves and dishwashers are now compelled to negotiate rising costs.
Certain companies such as Whirlpool, which manufactures 80% of its products sold in the U.S. within the country itself, seem better shielded from the impact of these tariffs. During an investors' conference earlier this month, Whirlpool’s executives informed analysts that they have secured contracts guaranteeing a supply of essential raw materials, particularly steel, for a duration of at least one year.
“As things stand currently, we have a fairly solid position,” stated Roxanne Warner, who serves as the senior vice president and controller at Whirlpool.
However, Abt, a family-run appliance and consumer electronics retailer based in Glenview, Illinois, was informed this week by suppliers that they will increase the recommended retail prices for items such as espresso machines and toasters by 10% to 15%, effective April 1st. This information comes from Richie Palmero, who handles small appliances at the store.
Abt offers coffee machines with prices between $100 and $500, along with espresso appliances ranging from $1,000 to $5,000.
Palmero mentioned that adding an additional $250 to a $2,500 price tag is considerable, yet she believes it won't lead to substantial declines in sales.
I believe customers would still purchase it due to its high quality," she stated. "However, they may contemplate their decision more carefully. This could lead to delays in purchasing. It probably won't be an impulsive buy for them. I doubt they'll opt for something from Mr. Coffee or a similar $20 model instead.
During Trump’s first term, tariffs were slapped in early 2018 on washing machines, and prices for the appliances spiked 12%, according to the American Economic Review, an academic journal. Clothes dryers became pricier as well, even though they weren’t targeted. The median price of washing machines and dryers increased by about $86 and $92 per unit, respectively, according to the academic journal.
Aluminum cans
According to the Can Manufacturers Institute, American beverage firms utilize over 100 billion aluminum cans annually. The majority of these lightweight rolled aluminum alloy sheets come from within the country; however, manufacturers also bring in a minor portion from abroad, as stated by the institute.
The Brewers Association, which represents 9,500 independent U.S. craft beer makers, estimates that 10% of U.S. cans are made from Canadian aluminum. Aluminum tariffs will force small brewers to pay more for cans, the association said, even as steel tariffs drive up the cost of equipment like kegs and fermentation tanks.
However, not every manufacturer is concerned about the aluminum tariffs. Molson Coors has relocated its production in recent years and currently obtains "nearly all" of the aluminum used for U.S. consumption from domestic sources within the country.
During a recent earnings call, Coca-Cola Chairman and CEO James Quincey stated that if the price of aluminum cans increases, the company has the option to switch to alternative packaging such as plastic bottles. He addressed investors, emphasizing his intention not to overstate the impact of aluminum tariffs on costs.
He stated, 'Do not assume this is a major determining element within American commerce. It simply represents an expense that needs management. Ideally, it wouldn’t impact the U.S. market, yet we will navigate through this challenge effectively.'
Aviation
Aircraft incorporate various metallic components, including aluminum for their frames, wings, and door panels as well as steel for their landing gears and engine elements. These pieces often come with highly specific designs and are frequently obtained from international suppliers.
The Aerospace Industries Association, representing approximately 300 aerospace and defense firms, warns that tariffs jeopardize both their sector and national security.
We have concerns regarding further strain on an already burdened U.S. supply chain," stated Dak Hardwick, the association's vice president for international relations. "Our team is exploring ways to mitigate the effects of potential new tariffs on our sector, and we aim to collaborate with the Trump Administration to underscore the vital part we play in fostering America’s economic growth, bolstering national security, and maintaining a strong deterrent posture.
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Alexa St. John from AP Climate news in Detroit provided additional reports.
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