On June 4, President Trump raised the tax on imported metals to 50%, twice what it was previously. While a federal court did recently block Trump’s sweeping tariffs, they will remain in effect for the foreseeable future as the White House appeals the court’s ruling.
While it’s possible that higher tariffs could boost domestic production of steel and aluminum, it’s more likely that the tax policy will raise costs for consumers and companies that rely on those products. In an interview with NPR, a North Carolina manufacturer explained how the tariffs could harm his business.
“How is it that you’re supposed to buy the most expensive steel in the world in the United States, and compete with global competitors who have access to world market pricing,” asked H.O. Woltz, who runs a company in Mount Airy, N.C. that twists steel wire into cables used to reinforce concrete.
During the first Trump administration, Woltz’s company was doubly squeezed — paying more for raw steel while competing with finished products from other countries that didn’t face a tariff.
Woltz worries the higher cost of building materials might put some construction projects on hold. And that’s just the beginning of the tariffs’ potential fallout, which affects many other industries.
“The ripple effects go into auto parts, motorcycles, machinery, and equipment that we use in mining — many, many different products,” said Katheryn Russ, an economist at the University of California, Davis.
Many forecasters are warning that Trump’s overall trade war is likely to lead to slower economic growth. Researchers estimated then that rising steel and aluminum costs resulted in the loss of tens of thousands of downstream manufacturing jobs.
Trump’s tariffs could also show up in higher prices at the supermarket, for everything from canned soup to a six-pack of soda.
“We know that we as can-makers pass these increases on to our customers—the food producers and soft-drink makers and the beer brewers—and they’ll pass that on to the consumer as well,” said Robert Budway, president of the Can Manufacturers Institute. “It’s a lose-lose for American consumers.”
While Trump’s trade agenda is intended to promote domestic manufacturing, a survey released recently showed factory orders and output being dragged down by tariffs and the often unpredictable way they’ve been rolled out.
“Maybe Trump wakes up tomorrow and changes his mind,” Woltz said grimly. “It makes planning super difficult.”
