The United States is set to impose a 25% tariff on imported steel and aluminium, a move that could have far-reaching consequences for industries relying on these essential materials. With major trade partners—including Canada, Mexico, Brazil, and the European Union—losing exemptions, the decision is expected to raise costs for businesses and potentially lead to higher prices for consumers.
As steel and aluminium are vital components in a wide range of goods, from canned food to cars and construction materials, several industries have warned that the tariffs will increase production costs. While companies may attempt to absorb some of the impact, there is a strong possibility that consumers will ultimately bear the financial burden.
Rising costs in food and beverage packaging
The canned food and beverage industry is among the sectors most directly affected by the new tariffs. Approximately 70% of the steel used to manufacture cans in the US is imported, according to the Can Manufacturers Institute (CMI). The organisation has raised concerns that, without exemptions, grocery prices for canned foods could rise as manufacturers face higher raw material costs.
Robert Budway, president of the CMI, stated that the move would harm both businesses and consumers, warning that it “undermines our food security and our supply resiliency for American canned food, which Americans rely on every day.”
Beyond canned food, the tariffs are also expected to affect the beverage industry, particularly beer and fizzy drink manufacturers that rely on imported aluminium. Coca-Cola’s chief executive, James Quincey, acknowledged the potential cost implications but suggested the company would look for ways to “adapt and mitigate” the impact.
Despite concerns from industry leaders, the US administration has indicated that no exemptions will be granted this time, neither for specific products nor for individual countries.
Implications for the automotive and construction sectors
The automotive industry has historically been sensitive to metal tariffs. When President Trump introduced similar measures in 2018, major carmakers, including Ford and General Motors, reported cost increases of approximately $1 billion. At the time, analysts estimated that consumers could face a 1% increase in vehicle prices, equivalent to around $300 per car, according to Morningstar.
David Whiston, an automotive analyst at Morningstar, suggested that Ford may experience similar cost pressures under the new tariffs, but the extent to which these increases will be passed on to consumers remains uncertain. Michael Wall of S&P Mobility added that while affordability concerns in the post-pandemic market may limit price hikes, some cost increases are likely to “trickle down to buyers.”
Meanwhile, the construction industry—one of the largest consumers of steel—could also see significant price increases. Carl Harris, chairman of the National Association of Home Builders, described the decision as “totally counter” to efforts to make housing more affordable, warning that tariffs on steel and aluminium would lead to higher home prices and slower development.
