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Steel and aluminum import costs in the United States are expected to be used, from baseball bats to cars and aircraft parts, increase in more than $ 100 billion after Donald Trump raised tariffs on 50 percent metals this week.
The highest levies that entered into force on Wednesday will result in additional costs of $ 52.6 billion a year in steel and aluminum products, according to Boston Consulting Group estimates.
The new rate carries the total expected costs in imports to $ 104 billion, approximately twice the impact forecast of $ 51.4 billion for consulting before Trump originally introduces a 25 percent tax in March.
Analysts said that the complex network of tariffs imposed by the US and frequent Trump changes to their tariff regime have made it difficult to predict how global metal trade would be affected and how many prices of products would increase in the United States.
“We have not really seen changes in commercial flows with a price increase of 25 percent so far,” said BCG managing director Nicole Voigt. “The question is, will we see it with a price increase of 50 percent and this depends on how the movement of prices [of the metals] It will leave. “
During an UBS conference earlier this week, Ford’s financial director, Sherry House, said half of the $ 2.5 billion in the gross rate impact that predicts by 2025 came from parts that included steel and aluminum.
The numbers could fluctuate due to tariff negotiations between the United States and China, said House, added: “China’s rates demolish the piece of pieces and aluminum and steel brings the piece of pieces. Therefore, the good news is that they are compensating.”
Canada and the European Union were the largest exporters of the United States of steel and aluminum products last year, while China was the largest for steel and Mexico derivatives for aluminum derivatives, according to the Congress Research Service.
The new US tariffs could lead to export losses of up to $ 2 billion for the metal sector in Canada for the rest of this year, $ 1 billion for Mexico and $ 600 million for South Korea, said Allianz Research.
European steel producers have warned that the 50 percent rate meant that the majority of 3.8 million tons of EU exports to the United States were now under a “de facto import prohibition.” They are concerned that much of the steel of other countries that had been destined to the US market will now deviate to Europe, similar to what happened in 2018 when the first US tariffs were introduced.
This week, the European Commission reported great increases in import volumes and the steep price drops for a series of steel products, including guitars to industrial robots, since the beginning of the year.
Tariffs imposed during the first Trump administration reduced imports of steel and aluminum products in an estimated 24 percent and 31 percent on average, the United States International Trade Commission found in 2023.
While this raised the average steel and aluminum prices in the US. UU. By 2.4 percent and 1.6 percent respectively, American metal production only increased by a small amount.
The US steel producers have intensified plans to expand production to increase capacity and help fill some of the gaps that will leave a drop in imports, but industry experts said it would spend time before the new factories were operational.
Philip Bell, president of the American commercial group, the Association of Steel Manufacturers, emphasized that there had been “more than $ 20 billion in investments in new steel facilities” since the rates were announced for the first time in 2018.
S&P Global Ratings estimates that the highest costs only with steel and aluminum could reach the profits of industrial goods manufacturers in “5-10 percent without price increases in 2025”.
Don Marleau, leader of the sector for metals, capital goods and containers in S&P Global Ratings, said that although this meant that companies would need to increase prices by 2 percent to maintain stable profits, manufacturers were expected to share part of the growing cost load to support sales.
