Trump tariffs: From soup cans to airplanes, steel and aluminum are a fundamental part of American life

2025-03-14 03:57:00

Abstract: Steel/aluminum tariffs may raise costs for construction, autos, appliances, and food/beverage industries. Some firms can adapt, but prices may rise.

Steel and aluminum are ubiquitous in the lives of Americans, from the aluminum soda cans in stainless steel refrigerators to the stainless steel drums inside aluminum washing machines. They are essential raw materials for products such as cars, airplanes, cell phones, frying pans, skyscrapers, and zippers. These metals play a critical role in supporting various aspects of modern life and industry.

The construction industry is a major consumer of steel in the United States, accounting for approximately one-third of steel shipments. The industry relies on global supply chains to build infrastructure such as airports, schools, and roads. While some contractors were able to lock in prices for steel or aluminum before the tariffs were implemented, the tariffs, if sustained, will further drive up construction costs at a time when labor and material costs are already rising. The uncertainty created by tariffs may also reduce companies' willingness to invest in large construction projects, thereby impacting future growth.

The Can Manufacturers Institute says that the United States currently relies on imports for 70% of its tinplate steel. Limited tariffs implemented by the Trump administration in 2018 led to the closure of nine U.S. tinplate steel production lines, as manufacturers switched to other types of steel or ceased production altogether, leaving only three production lines in operation. Campbell Soup Company President and CEO Mick Beekhuizen said that the company imports tinplate steel from Canada and is working with suppliers to mitigate the impact of tariffs, but may need to raise product prices. The Consumer Brands Association has also called on the Trump administration to exempt aluminum and steel products that are not adequately supplied domestically, otherwise consumers may face higher grocery prices.

While most of the steel and aluminum used by Ford, General Motors, and Stellantis already comes from the United States, reducing the direct impact of tariffs, experts warn that tariffs could lead the Big Three automakers in Detroit to raise prices. Domestic steel and aluminum producers need to increase capacity to meet demand, or they may face short-term supply shortages, which could drive up product prices and car costs. Tesla CFO Vaibhav Taneja also said that the implementation of tariffs could have an impact on the company's business and profitability. Data from Kelley Blue Book shows that the average transaction price for a new car last month was just over $75,800, and tariffs could adversely affect American car buyers who are already sensitive to inflation.

Manufacturers and retailers of products ranging from microwaves to dishwashers are considering how to cope with rising costs. Companies like Whirlpool appear to be more resilient to the impact of tariffs, as the company produces 80% of the products it sells in the United States domestically. Whirlpool executives said that the company has locked in contracts for most of its raw materials, including steel, for at least a year. However, Abt, a family-owned business based in Glenview, Illinois, has received notices from manufacturers stating that the suggested retail prices for countertop products such as coffee makers and toasters will increase by 10% to 15% from April 1. The Retail Industry Leaders Association said that the combined effect of these import taxes, tariffs on Chinese goods imposed during Trump's first term, and the new round of tariffs imposed on Chinese products last month could be substantial, ultimately increasing the cost of living for American families.

Data from the Can Manufacturers Institute shows that U.S. beverage companies use more than 100 billion aluminum cans each year. While most of the thin aluminum alloy sheets used for cans are made in the United States, can manufacturers do import a small amount. The Brewers Association estimates that 10% of the cans used in the United States are made from Canadian aluminum. Aluminum tariffs would force small brewers to pay more for cans, while steel tariffs would drive up the cost of equipment such as beer kegs and fermentation tanks. However, not all manufacturers are concerned about aluminum tariffs. Molson Coors said that the company has shifted production in recent years and that "virtually all" of the aluminum it uses for U.S. consumption now comes from the United States domestically. Coca-Cola Chairman and CEO James Quincey said that if aluminum cans become more expensive, Coca-Cola could switch to other materials, such as plastic bottles. He also said that the cost of aluminum tariffs should not be exaggerated.

Airplanes are made up of a variety of metal parts, from aluminum frames, wings, and door panels to steel landing gear and engine components. Many of these parts are highly specialized and come from overseas. The Aerospace Industries Association, which represents nearly 300 aerospace and defense companies, said that tariffs would put their industry and national security at risk. Dak Hardwick, the association's vice president of international affairs, said: "We are concerned about further downward pressure on already strained U.S. supply chains. We are investigating strategies to mitigate the impact of new tariffs on our industry and hope to work with the Trump administration to highlight the critical role we play in America's economic prosperity, defense, and deterrence."