President Trump has raised tariffs on steel and aluminum imports to 50 percent less than three months after imposing a 25 percent tariff on them. He said the move, made Wednesday, would help support U.S. steel companies, but many domestic businesses say that the latest increase would hurt them and raise prices for all Americans.
U.S. home builders, car manufacturers, oil producers and can makers will be among the most affected. Many companies in those and other industries will likely pass on cost increases to their customers.
“It means higher costs for consumers,” said Mary E. Lovely, a senior fellow at the Peterson Institute for International Economics, a research organization in Washington that tends to favor lower trade barriers.
These are some of the industries that could feel the biggest effects from Mr. Trump’s latest tariffs.
American Steel Makers
Industry groups representing domestic steel producers praised the steeper levies, which they said could spur investment and create jobs in the United States.
Kevin Dempsey, the president and chief executive at the American Iron and Steel Institute, said the latest increase would help U.S. steel producers compete with China and other countries that have flooded the global market with metal. Mr. Dempsey said the industry had worried that the 25 percent tariff on steel imports alone was not sufficient.
“The increase to 50 percent is well justified and will help prevent a new surge in imports of steel,” Mr. Dempsey said.
He added that higher tariffs would eventually help create new jobs.
“Over time, increased production will lead to increased employment,” Mr. Dempsey said.
Foreign Steel Producers
Suppliers in Britain will continue to face a 25 percent tariff on the steel and aluminum they sell to the United States for now, under a reprieve the country negotiated with the Trump administration last month. But other metal exporters like Canada will be hit hard.
Canada is the largest foreign supplier of steel and aluminum to the United States. The Canadian Steel Producers Association condemned the Trump administration’s latest increase and said in a statement that it “essentially closes the U.S. market to our domestic industry.”
Mexico, Brazil, South Korea and Germany are also big suppliers of steel. The European Steel Association warned that the administration’s latest increase could result in a flood of cheap foreign steel being dumped into Europe as countries look for other markets.
Aluminum Producers
Industry groups representing aluminum makers have voiced support for the Trump administration’s attempts to strengthen the industry. But officials have also said that U.S. aluminum companies need a reliable source of that metal from Canada to turn into more specialized products. That kind of manufacturing supports U.S. jobs and investments, industry officials said.
“We urge the administration to take a tailored approach that reserves high tariffs for bad actors — such as China — that flood the market and includes carve outs for proven partners — such as Canada,” Matt Meenan, a spokesman for the Aluminum Association, said in a statement.
The association said that steeper tariffs alone would not be enough to increase domestic production, and that the industry needed “consistent, predictable trade and tariff policy to plan for current and future investment.”
Automakers
Higher steel tariffs are likely to raise the cost of new cars and trucks. That will be bad for consumers, who are already facing near-record prices for new vehicles, and car companies that are contending with higher costs stemming from previous tariff increases on imported vehicles and engines and other components.
“These tariff increases will further raise the cost of both imported and domestic steel and aluminum, thereby increasing the cost of assembling a car in the United States,” said Matt Blunt, president of the American Automotive Policy Council, which lobbies on behalf of General Motors, Ford Motor and Stellantis. “This action places U.S. industry and U.S. workers at a disadvantage in the global marketplace.”
Steel and aluminum once accounted for most of the cost of a new car or truck. Computer chips and other electronics now tend to cost a lot more per car than those metals.
It is unclear how much the increased steel and aluminum tariffs alone will result in higher new-car prices. Analyst estimates range from a few hundred dollars to $1,000 or more per vehicle. It is also unclear how soon the effect will be felt.
Automakers and their suppliers have been modifying operations to adjust to the earlier Trump tariffs. Some have stockpiled steel, giving them a cushion that will delay the impact of the newly increased duties.
Home Builders
Mr. Trump’s tariffs could drive up housing costs and deter new development as homebuilders pay higher prices for steel and aluminum products.
Buddy Hughes, the chairman of the National Association of Home Builders, said that before the administration’s latest increase on Wednesday, builders had already estimated that new tariffs would add $10,900 to the average cost of a new home.
“President Trump’s move to double steel and aluminum tariffs will have a negative impact on housing affordability by further disrupting building material supply chains and fueling business uncertainty,” Mr. Hughes said in a statement.
Can Manufacturers
Can makers have warned that consumers will see higher prices at the grocery store because of the steeper metal tariffs.
The Can Manufacturers Institute, which represents the domestic metal can industry, said that significant cuts by tin mill steel producers over the past eight years have decreased U.S. output of the specialized steel by 75 percent. Because of the drop, domestic can makers and canned food producers import nearly 80 percent of tin mill steel from foreign allies, according to the institute.
“Doubling steel tariffs will inflate domestic canned food prices, and it plays into the hands of China and other foreign canned food producers, which are more than happy to undercut American farmers and food producers,” Robert Budway, the president of the Can Manufacturers Institute, said in a statement. “Ultimately, these metal tariffs put our nation’s food security at risk.”
Oil and Gas Producers
Higher steel tariffs will also squeeze U.S. oil companies, which need steel to build pipelines and produce oil and natural gas. Steel can make up 10 to 20 percent of the cost of a new well, executives have said.
Metal costs have risen even as oil prices have fallen nearly 20 percent since Mr. Trump took office, an unpalatable combination for producers. Smaller companies, which generally do not order as much material in advance, have been particularly hard-hit.
Many companies cut spending even before Mr. Trump raised tariffs on steel imports. Some predict that production from U.S. shale basins, which generate most of the country’s oil, will peak later this year, if it has not already.
Madeleine Ngo covers U.S. economic policy and how it affects people across the country.
Neal E. Boudette is based in Michigan and has been covering the auto industry for two decades. He joined The New York Times in 2016 after more than 15 years at The Wall Street Journal.
Rebecca F. Elliott covers energy for The Times with a focus on how the industry is changing in the push to curb climate-warming emissions.
The post How Higher Tariffs on Steel and Aluminum Will Affect Companies appeared first on New York Times.
