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The US import costs of steel and aluminum used in everything from baseball bats to car and aircraft parts are expected to rise by more than $100 billion after Donald Trump raised metal tariffs to 50% this week.
The high taxation that took effect on Wednesday will bring an additional $52.6 billion annual fee for steel and aluminum products, according to Boston Consulting Group estimates.
The new rates increased the total estimated cost of imports to $104 billion, roughly double the consulting firm’s $51.4 billion impact forecast before Trump originally introduced a 25% collection in March.
Analysts said the complex web of tariffs imposed by the US and frequent changes to his tariff regime made it difficult to predict how global trade in metals will be affected, and how much the price of products will rise in the US.
“With a price hike of 25%, we have not seen any real changes in trade flows,” said Nicole Voight, BCG managing director. “The problem is seeing it with a 50% price hike, which depends on how the price movement (of metals) goes.”
At a UBS meeting earlier this week, Ford’s Chief Financial Officer Shelley House said half of the $2.5 billion impacting 2025 total tariffs comes from parts containing steel and aluminum.
Numbers could fluctuate due to tariff negotiations between the US and China, the House added, “China tariffs cut parts, while aluminum and steel make parts into pieces.
Canada and the European Union were the top exporters of US steel and aluminum products to the United States last year, but China was the largest steel and Mexico in steel, according to Congressional Research Services.
According to Allianz Research, the new US tariffs could result in export losses of up to $2 billion in Canada’s metals sector, $1 billion in Mexico and $600 million in South Korea for the remainder of the year.
European steel producers have warned that a 50% tariff means that most of the 3.8 million tonnes of EU exports are currently based on a “de facto import ban.” They worry that much of the steel from other countries destined for the US market will instead be biased towards Europe.
This week’s Commission reported a significant increase in imports and steep prices and a sharp decline in the volume of steel products, including guitars, from the beginning of this year.
The tariffs imposed during the first Trump administration were discovered in 2023 by the US International Trade Commission, which reduced imports of steel and aluminum products by an average of 24% and an average of 31%.
This increased the average price of steel and aluminum by 2.4% and 1.6% respectively, but American production of metals increased slightly.
US steel producers have stepped up plans to expand production, increase capacity and fill some of the gaps left by declining imports, but industry experts said it will take some time for the new factories to operate.
Philip Bell, president of the US trade group The Steel Manufacturers Association, stressed that since tariffs were first announced in 2018, there have been “more than $2 billion in investments in new steel facilities.”
S&P Global Ratings estimates that the higher the cost from steel and aluminum alone, the more likely the industrial product manufacturer’s revenues will reach “5-10% without price increases in 2025.”
Don Marleau, the metals, capital goods and packaging sector at S&P Global Ratings, said this meant that companies would need to raise prices by 2% to stabilize profits, and manufacturers were expected to share some of the rising cost burden to support sales.
