The tariff rate on foreign steel and aluminum products imported into the United States has been increased from 25% to 50%. The Trump administration has pushed for the tariff hike to “protect the American steel industry,” but the move is expected to drive up prices for virtually all products, from canned goods to automobiles, deepening consumer concerns about inflation.

The 50% tariff on foreign steel and aluminum, announced by President Donald Trump, took effect on June 4. On June 3, Trump signed a proclamation raising the tariff rate from 25% to 50%, following his announcement on May 30 to double the tariffs. During a speech at a U.S. Steel plant near Pittsburgh, Pennsylvania, Trump emphasized that the tariff increase would “secure the American steel industry.”

Trump justified the tariff hike by citing investigations under Section 232 of the Trade Expansion Act, submitted by the Commerce Secretary in January 2018, and updated information provided by the current Commerce Secretary. These investigations concluded that the volume and conditions of steel and aluminum imports threaten national security.
The Trump administration’s decision to double tariffs on steel and aluminum has sparked widespread concern among economic organizations and experts, except for some steel companies. Since steel and aluminum are used in nearly every industry, a “price tsunami” effect, raising the cost of all products, is considered inevitable. According to Jason Miller, a professor of supply chain management at Michigan State University, during Trump’s first term, steel and aluminum tariffs led to a 5-10% price increase for major appliances between June 2018 and April 2019, far exceeding the 2% inflation rate during that period. Experts agree that major appliances like refrigerators, dishwashers, and washing machines, which rely heavily on steel, are particularly vulnerable to price hikes. Kyle Handley, an economics professor at the University of California, San Diego, noted, “A 25% tariff was already high; 50% is extraordinarily high.”

The most significant price impact will likely be felt in the automotive sector. Steel accounts for approximately 60% of a car’s weight, making it the most used material. Experts predict that automakers will likely raise consumer prices to offset some of the increased production costs. William Hauk, an economics professor at the University of South Carolina, stated, “The new tariffs could drive car prices up by $2,000 to $4,000.”
The aluminum tariff increase is also expected to raise prices for food and beverages packaged in aluminum cans, such as beer and soft drinks. Experts estimate that a 50% tariff on steel and aluminum could increase the price of a can of soup or soda by about one cent.

Hauk remarked, “While that may not seem significant, when you consider how much soda or beer people consume from aluminum cans annually, the costs add up over time.” According to the Beer Institute, the previous 25% aluminum tariff resulted in $1.7 billion in losses for the U.S. beverage industry between 2018 and 2022.
Robert Budway, president of the Can Manufacturers Institute, stated, “In recent years, manufacturers have become increasingly reliant on imported materials, and the ones who will bear the brunt of these tariff increases are American households.”

By Reporter Hong-Yong Park