This is an update of an article originally published on April 9, 2025. 

On June 4, President Donald Trump increased the Section 232 tariffs on steel and aluminum imports to 50%, up from the 25% tariff initially announced in March. On July 8, Trump placed a 50% levy on copper imports, now considered a critical mineral in the U.S., to take effect on August 1. These tariffs have had different effects on businesses, with both risks and opportunities depending on the industry.  

In addition to steel and aluminum tariffs, Trump announced new tariffs (excluding steel and aluminum) on April 3 (referred to as “Liberation Day”), ranging from 10% to 50%, which could affect some of America’s largest trading partners. Most of the announced Liberation Day tariffs have been extended to Aug. 1 to allow for tariff negotiations with most countries. On July 28, Trump announced he would likely implement a blanket tariff between 15% and 20% on imports from countries that have not negotiated separate trade agreements, an increase from the 10% baseline announced in April. 

While these latest measures excluded steel and aluminum producers, they contribute to the industry’s complex and uncertain operating environment. A closer look at where a company falls in the metals value chain and the nature of its business may offer clearer insight into whether it stands to benefit from the tariffs situation or if it faces the prospect of higher costs.  

Trump restored Section 232 tariffs to “protect America’s critical steel and aluminum industries”¹ (and now copper) with levies applying to some of the country’s closest allies, including Mexican and Canadian firms selling metal into the U.S. Covering all U.S. imports of steel and aluminum (including finished metal products) from all foreign suppliers, the tariffs are meant to crack down on what Trump administration officials said were efforts by certain countries to circumvent existing duties. The tariffs could force changes in global supply chains and expedite the need for global metal firms to build, buy and grow in the U.S. market.   

Large U.S. trade associations have supported the tariffs to differing extents. The Steel Manufacturers Association (SMA)² and the Aluminum Association (AA)³ have welcomed the tariffs. And while the Metal Service Center Institute (MSCI)⁴, which represents steel service centers in North America, has not supported tariffs on Canada and Mexico, the organization does seek free and fair trade for metals, something all three associations agree on. 

The effects of these tariffs depend on where a company lies in the metals value chain and where they operate in the world. We see the impacts of tariffs breaking down as follows.  

• 

  For metal producers in North America, steel and aluminum prices had been rising for months, in anticipation of and after the implementation of tariffs, both the initial Section 232 tariff of 25% and the follow-up increase to 50%. As a result, metal producers have implemented higher prices and increased profitability. In the U.S., elevated prices should continue boosting domestic production, much like the effects observed after the implementation of Section 232 in 2018.  

• 

  U.S. metal service centers that deal in steel, aluminum and copper, purchasing raw metal from producers and selling it to end customers, are seeing an immediate increase in earnings and improved market positions. Many of these centers had made substantial purchases early on but have gradually reduced inventory levels given the uncertain effect on end market demand. The introduction of both rounds of tariffs has resulted in strong profits during the first half of the year but has caused some demand destruction in the traditional steel markets—housing, auto, and energy—and contributes to uncertainty in general.  

• 

  U.S. metal traders and distributors mostly handle metal on a presold or back-to-back basis, so the impact of imported or traded metal often leads to higher prices being passed on to the U.S. consumer/customer. However, higher prices have caused a noticeable reduction in volumes, especially with the uncertainty of not knowing when the tariffs by country of origin will be finalized. Traders and importers are uncertain where they can receive the best value from foreign mills and if customers will accept higher prices. More traders have moved to purchasing domestic metal to avoid being penalized later.  

• 

  U.S. scrap and recyclers in steel, aluminum and copper have seen prices on the rise due to increased demand. In particular, aluminum scrap prices rose due to the shift toward using more secondary aluminum, which caused imbalances between supply and demand, impacting customers downstream. In fact, for aluminum, the “Midwest premium,” whereby aluminum producers charge for transportation and storage costs and for doing business in the region, more than doubled to over 69 cents per pound, reaching record levels. The surge has led to higher profits, which should continue in the coming months.  

• 

  For metal fabricators or end-market users of metal, the cost of raw metal has risen significantly, and each user must decide how much of the price increases they will absorb versus passing it on to consumers. Many have been hedging their metal purchases, while others have secured long-term contracts (i.e., buying off of an indexed-based metal price), which would gradually reflect price increases for their customers. The increase in tariffs from 25% to 50% has caused a slowdown in business activity until the situation is clarified. Many metal fabricators have decided to eat some of the tariffs to gain or maintain market share. It all depends on the fabricators financial position and strength in its respective market.  

Since the April 3 and June 4 tariff announcements, metal prices, like most commodity prices, initially rose but have since begun to moderate or decline due to demand concerns. Even with tariff announcements, metal prices will ultimately be determined by supply and demand, which means not all of the 50% increase in price is reflected in current metal prices. Many metal buyers had purchased significantly more metal in anticipation of higher prices and are in process of working down inventory levels.    

The increase in steel and aluminum tariffs (and recently copper) to 50% has impacted the entire world. The result has been a slowdown in metal movements between countries with the hope of future lower tariffs through negotiations with individual countries. However, it bears noting that the individual tariff agreements struck to date do not include steel and aluminum.  

Our view is that the newly imposed metal tariffs of 50% on Canada and Mexico may remain in place (or reduced back down to the original 25%) and will expedite the reworking of the USMCA treaty.  

Of course, countries could impose reciprocal tariffs on various U.S. goods, which would lead to changing supply chains and price increases for consumers. The question becomes: Does this ultimately lead to demand destruction? The answer may depend on deregulation, Federal Reserve interest rate policies and U.S. tax policies.  

In the meantime, broadly applied tariffs will continue to have narrow impacts on U.S.-based metals and manufacturing companies.  

Interested in learning more? Visit our Cross Border Perspectives hub for timely insights about international trade’s impact on economies and markets.  

_{1 Fact Sheet: President Donald J. Trump Restores Section 232 Tariffs – The White House}  

_{2 Steel Manufacturers Association Welcomes the Section 232 Tariff on Imported Steel - Steel Manufacturers Association}  

_{3 U.S. Aluminum Industry Responds to 232 Implementation, Calls for Certainty in Tariff Landscape | The Aluminum Association}  

_{4 MSCI Statement On U.S. Tariffs On Steel And Aluminum Imports – The Metals Service Center Institute}