A 25% tariff on steel and aluminum imports into the United States is set to take effect next month, impacting major trade partners like Canada, Mexico, Brazil, and the European Union. The expanded tariff measures, announced by President Donald Trump, will end previous exemptions that allowed certain goods to enter without additional taxes. This could result in higher costs for U.S. businesses needing to import these metals, with the possibility that these added expenses may be passed on to consumers.

1. Canned Food, Beer, and Soft Drinks
   Steel imports account for roughly 70% of the material used in U.S. can production for food items, according to the Can Manufacturers Institute (CMI). This steel typically comes from Germany, Canada, and the Netherlands. After tariffs were imposed on steel in 2018, many can manufacturers were granted exemptions, allowing them to import steel tariff-free. However, with the ongoing reduction in U.S. steel production, prices for steel have risen, raising concerns from the CMI. Large food companies, such as General Mills and Goya, have urged the Trump administration to reconsider, warning that grocery prices for canned foods could rise without exemptions for the steel used in cans.

Similarly, the beverage industry, including companies like Coca-Cola, has expressed concerns that aluminum tariffs could push up prices for cans used in beer and soft drinks. Coca-Cola’s CEO, James Quincey, stated that while the company would try to absorb the impact, higher consumer prices were still a possibility.

2. Cars
   After similar tariffs were enacted in 2018, U.S. car manufacturers like Ford and General Motors warned that the move could add about $1 billion to their costs. Morningstar analysts estimated the price increase for consumers would be around 1%, or approximately $300 per vehicle. With the potential for renewed tariffs on steel and aluminum, carmakers may once again face rising costs, although it remains uncertain how much of that increase will be passed on to consumers.

Analysts also point to the wider economic impact, especially with tariffs on all goods from Canada and Mexico, which could raise the cost of vehicles by up to $3,000 if fully implemented. Ford’s CEO, Jim Farley, has expressed concerns that Trump’s actions are causing significant challenges for the industry.

3. Construction, Housing, and Appliances
   The construction industry, a major consumer of steel, is poised to face rising costs due to the expanded tariffs. Builders rely on steel for everything from structural frames to appliances. Carl Harris, chairman of the National Association of Home Builders, criticized the tariffs, stating they are at odds with the president’s goal of making housing more affordable. He warned that these measures would lead to higher housing prices and slow development efforts.

In addition, appliance maker Whirlpool experienced a $350 million increase in costs in 2018 due to higher steel prices, and other companies may struggle to absorb such price hikes. This could result in higher retail prices for consumers.

In conclusion, the new tariffs on steel and aluminum could have significant ripple effects across various industries, from food and beverages to cars and construction, ultimately driving up costs for consumers.