Steel & Aluminum Tariffs: Brace for Price Hikes on Everyday Items

The U.S. implementation of sweeping 25% tariffs on all steel and aluminum imports is poised to trigger a surge in prices across a wide spectrum of products, impacting everything from automobiles and household appliances to construction materials and canned goods. This measure, designed to shield domestic industries from foreign competition, is expected to ripple through the economy, raising costs for manufacturers, suppliers, and ultimately consumers.

Widespread Price Hikes Expected

Experts predict that virtually any product incorporating steel or aluminum will be subject to price increases. "All manufacturing that uses steel or aluminum, or uses something that uses steel and aluminum will be affected," Christine McDaniel, a senior research fellow at the Mercatus Center at George Mason University, told CBS MoneyWatch. Dr. Wayne Winegarden, a senior fellow and director at the Pacific Research Institute, characterized the impending tariff impact as "a barn burner," leading to higher prices and an economic slowdown. He emphasized that all "broad-based core commodities" are vulnerable to price hikes as a result of the levies.

The ramifications extend beyond automobiles and electronics, which heavily rely on metals. Even less obvious goods like canned foods could experience price increases if packaging costs escalate. "We are going to see it in places you don't expect it," Winegarden warned.

Automotive Sector Faces Significant Costs

Car, truck, bus, and tractor parts were the largest import category by volume last year, according to the United States International Trade Commission. The American Automotive Policy Council, representing Ford, General Motors, and Stellantis, stated that the new tariffs "will add significant costs for automakers, suppliers and consumers." Inevitably, some of these added costs will be passed along to consumers.

Layna Mosley, a politics and international affairs professor at Princeton School of Public and International Affairs, explained, "It is not easy for American companies that use steel and aluminum in production to find it elsewhere, so we'll see increases in prices. Makers of vehicles will face higher costs, which will be passed on to consumers."

Construction and Housing Costs Rise

Metal parts used in doors, window frames, and other hardware essential for housing construction will also be subject to the tariffs, leading to escalating costs for homebuilders. Jim Tobin, CEO of the National Association of Home Builders, pointed to estimates suggesting that the metal tariffs could add up to $10,000 to the cost of a home. However, he noted that it might take months for the full impact to become apparent.

"Those costs are going to be passed on to the ultimate homeowner or renter," he told CBS News.

Impact on Appliances and Other Goods

Machine parts, including steel wires, screws, and more, are also likely to be affected, driving up the price of a diverse range of appliances, from dishwashers and dryers to garbage disposals and refrigerators. McDaniel emphasized that "virtually any product incorporating steel or aluminum will be subject to price increases."

Even the brewing industry is not immune. Brooklyn-based brewery Talea, which uses aluminum for its beer cans, could face higher operating costs due to the tariffs. Co-founder LeAnn Darland expressed concerns about sharing increased costs with suppliers and uncertainties regarding consumer willingness to accept price hikes.

Inflationary Pressures Mount

Analysts warn that the tariffs are likely to exert upward pressure on inflation, particularly for small and midsize businesses already grappling with rising input costs. Megan Cerullo, a New York-based reporter for CBS MoneyWatch, highlighted the potential for "squeezed profits" and the need for businesses to pass on costs to consumers, further fueling inflationary expectations.

The broader economic implications of these tariffs remain to be seen, but the potential for widespread price increases across various sectors is a significant concern. Consumers may face a more challenging financial environment as they navigate rising costs for essential goods and services.