The US trade landscape has been on a rollercoaster ride in 2025, and while the dust seems to be settling, the metals manufacturing sector is now dealing with a tariff hike that saw aluminum and steel taxes hiked from 25% to 50% on June 4, 2025.
This tariff applies to imports from all countries except the UK (where a 25% tariff remains in place until at least July 9, 2025). According to a White House statement, imports of these metals were “weakening” the domestic economy and threatening national security. It’s hoped that being less reliant on international supply will strengthen US manufacturing and create more jobs while making the country less reliant on global supply lines that could be cut, restricted, or weaponized due to global and political events.
At RealSTEEL™, we prioritize efficiency and have helped metal fabricators and steel service centers optimize operations and supply chains. In this guide, we’ll consider the impact of these tariffs, discuss what they mean for US metals companies, and highlight strategies for continued success in this complex and ever-changing landscape.
The Current Tariff Landscape for the Steel and Metal Industry
President Donald Trump imposed a 25% tariff on steel and aluminum imports in February 2025 before doubling the tariff on June 4. In addition, he imposed a 10% baseline tariff on all countries, as well as country-specific tariffs, such as a 34% reciprocal tariff on imports from China.
It was argued that these countries have exploited unfair trading partnerships with the US, taking money out of the country and taking jobs away from US citizens. Section 232 of the Trade Expansion Act of 1962 gives the President the right to impose tariffs on imports that “threaten to impair” national security, paving the way for the argument that tariffs will stem the flow of harmful goods (such as drugs), reduce reliance on foreign suppliers, and boost domestic industry critical for national security.
The US is the biggest steel importer in the world, and while China is the biggest producer, the US actually imports very little Chinese steel, choosing instead to import from Canada, Brazil, Mexico, and South Korea, among others.
The tariffs were met with concern from major importers and exporters alike, especially as they don’t just cover raw materials but also apply to derivatives. This means that in addition to raw steel and aluminum, the tax rate also applies to fasteners, construction materials, auto parts, and structural products, as well as everything from sewing needles and springs to cookware and tennis rackets.
Direct Implications for US Metals Companies
Tariffs have a direct impact on production costs, and higher production costs typically mean more expensive products when manufacturers pass those prices on to consumers.
Manufacturers could rely on domestic materials, but the country consumes more than it produces. In 2024, for instance, it produced 670,000 metric tons of aluminum, but it used over 4 million tons. Furthermore, some specialist materials, such as certain grades of steel, are not readily available domestically.
Some companies, at least initially, will be forced to take the brunt of those tariffs, leading to suggestions that vehicle prices could rise by between $400 and $3,000 per vehicle. The construction industry will also face higher prices, and they could even hit everyday food purchases, with the US producing over 115 billion aluminum soft drink cans and over 20 billion steel food cans every year.
Domestic producers will likely see a surge in demand, but if that demand outstrips the supply, it may lead to higher costs and make imports more viable. On the plus side, greater demand for domestic metals will provide a boost for US companies and their workforces and could lead to job growth within the metals sector.
Initial supply chain disruptions may cause problems for US metals companies, and they must also weigh up the pros and cons of absorbing import taxes and reducing their profit margins or passing them on to consumers and potentially frustrating their client base.
Broader Economic and Business Implications
After President Donald Trump began announcing new tariffs, many countries chose to retaliate with tariffs of their own. These retaliatory tariffs caused panic in the markets and led to some stark warnings and threats. For the most part, the threats have now died down, but we may see further retaliations in the future once the impact of these tariffs takes hold.
It could also create inflationary pressure during a difficult time for the global economy. If consumers pay more for canned goods, homes, and cars, it could weaken the nation financially, at least in the short term.
Furthermore, while these measures should result in job growth within key domestic manufacturing markets, they will have an adverse impact on sectors reliant on imports, including forced relocations and closures.
Of course, nothing is certain. There are a lot of “ifs”, “ands”, and “buts”—a lot of things that could but may not happen. All of that uncertainty is a problem in itself, as companies and consumers don’t know where they stand, and the speed at which the tariffs were announced and implemented is a concern for any company reliant on imports.
Strategies for US Metals Companies to Mitigate Tariff Impacts
Despite the uncertainty and the risks of reduced profits, consumer frustration, and higher import costs, there are a few things that US metals companies can do to mitigate the impact of steel and aluminum tariffs:
- Diversify the Supply Chain: Focus on domestic sourcing where possible, explore countries subject to lower tariffs, and monitor the global tariff situation.
- Inventory Management: Consider expanding inventory when tariffs are lowered or paused while also weighing up the sustainability of managing current inventory. A dedicated inventory management solution can help with this.
- Improve Efficiency: Use state-of-the-art business management solutions like RealSTEEL™ to improve efficiency, reduce material waste, and optimize resource use.
- Cost Analysis: Calculate how much of the cost you can absorb and how much you can afford to pass on to the consumer. Check your competitors, stay in touch with the market, and balance price increases against dwindling consumer support.
- Collaborate: Work with suppliers to negotiate better rates and strike deals with customers to support them and maintain their business without absorbing all of the costs.
- Stay Engaged: Be an advocate for your industry and voice your concerns about new policies while keeping an ear to the ground and learning about all new changes and upcoming proposals.
Conclusion: Adapting to a New Trade Era
Tariffs clearly present challenges for the US metals industry, but they could also create opportunities for domestic growth. If the US becomes less reliant on foreign materials, companies with a greater domestic focus can scale quickly and efficiently while adopting a US-first strategy.
Either way, it’s a major change that will have far-reaching consequences, so business leaders in the metals sector must adopt a strategic approach, ensuring they remain agile and adaptable while preparing for all eventualities.
This includes adapting supply chains, preparing the workforce, and adopting intelligent business management software solutions such as RealSTEEL™. Adaptation is going to be critical in the coming years, and by working with a scalable, intuitive software suite, you can ensure your business is ready for anything.
Contact us to request a demo and see RealSTEEL™ in action.
