Trump’s latest sweeping tariffs on certain metals may broadly impact everyday goods, from certain foods in the grocery aisle to the price of your child’s bike.
President Donald Trump signed proclamations on Feb. 10 that raise steel and aluminum imports to a 25% rate, eliminating previous country exceptions and exemptions. The new blanket tariffs will go into effect on March 12, 2025, and will impact major suppliers including our nearest allies Canada and Mexico.
The measures are an expansion of Trump’s 2018 Section 232 duties, which had set steel tariffs at 25% and taxes on aluminum imports at 10%. The Trump administration cited the tax is set to counter trade practices that “undermine national security.”
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Mainly, the White House fact sheet suggests that the tariffs are being placed to end loopholes that have led to the transshipment of products like steel produced in countries like China to the U.S. through its key trading partners.
Such tariffs, however, can have broad impacts across different industries.
For homebuyers in the U.S., tariffs on essential building materials usually translate to higher home prices. Meanwhile, homebuilders worry the tariffs will impact construction costs and hinder their ability to deliver new projects.
Experts say you can expect higher prices from canned foods, beer, and soda in the grocery aisle, as many rely on imports from Canada and Mexico. Even domestic car prices may be slightly impacted.
Here’s what the latest tariffs on key metals mean for you.
Canada considers retaliation
A week after Trump issued a 30-day pause on 25% tariffs on all Canadian and Mexican imports to the U.S., the two neighboring countries are once again on the brink of another trade spat.
Outgoing Canadian Prime Minister Justin Trudeau said Tuesday that Trump’s tariffs on steel and aluminum imports were “entirely unjustified” and that his country would continue working with the Trump administration over the next weeks.
Trudeau also noted that Canada is the U.S.’s closest ally and that Canadian steel is used in several American industries including defense, automotive, shipbuilding, energy, and manufacturing. Canada is the largest source of steel and iron imports to the U.S.
- According to the Canadian Steel Association, about $20 billion in steel is traded between Canada and the U.S. each year.
- Additionally, 40% of Canada’s steel imports come from the United States.
The Canadian Steel Association said that Trump’s targeted tariffs are “baseless and unwarranted” as the country has already worked hard to align trade policy with the U.S. For instance, Canada had already imposed its own Section 53 tariffs on Chinese steel imports and a monitoring system to ensure it can identify the country of “melt and pour.”
“Canadians will stand up strongly and firmly if we need to,” said Trudeau.
Mexico characterizes the tariffs as ‘unusual’
Mexico’s government officials are digesting Trump’s latest wave of tariffs.
“We have to keep a calm head and weigh our response as things progress,” said Mexico’s President Claudia Sheinbaum in a press conference on Feb. 11. Sheinbaum added that tariffs on Mexican steel and aluminum would violate the USMCA free trade agreement.
Meanwhile, Mexico’s economy secretary Marcelo Ebrard said that tariffs would be a “very unusual case” as Mexico imports more steel and aluminum from the United States than it exports to the country.
- Ebrard said the U.S. had a $6.9 billion surplus with Mexico on steel and aluminum trade in 2024.
- The government argues that retaliatory tariffs on United States imports of those metals would have a harsher economic impact.
Canned goods, vehicles, and housing prices on the rise
(Image credit: Getty Images)
Trump’s across-the-board 25% tariffs on steel and aluminum will impact several industries. Some prices will be visible on your grocery list.
- Canned goods and beverages
Nearly 70% of tin plate steel used to make cans for fruits, vegetables, essential foods, and pet food is imported to the U.S., according to the Can Manufacturers Institute (CMI). Many industries use aluminum and steel to manufacture their products, which can include beverages and sodas.
Coca-Cola CEO James Quincey said the company imports aluminum for its cans from Canada. In response to tariff hikes, the company may increase production of its beverage in plastic bottles. It may also source aluminum domestically, which would likewise increase consumer prices.
- Newly built homes or renovations
Aluminum and steel are used as raw materials in home construction, which may lead to higher home prices as builders pass on tariff costs to consumers. Homebuilders are also worried about supply-chain disruptions which may impact their ability to deliver new projects.
Additionally, if the United States lifts its temporary pause of 25% blanket tariffs on Mexico and Canada on March 1, that will impact other critical supplies like gypsum (used for drywalls) and softwood lumber. More than 70% of the two materials come from the two neighboring countries.
The National Association of Home Builders (NAHB) sent a letter to President Trump requesting tariff exemptions on building materials before these tariffs take hold. However, the Trump administration’s stance on “no exceptions or exemptions” isn’t promising.
- Automobiles and car parts
Canada’s steel and aluminum imports to the United States benefit the automotive, aerospace, and construction industries. Canada, Brazil, and Mexico were the largest suppliers of steel to the U.S. in January, with Canada firmly in the lead.
How can this hit domestic companies? Ford sources 90% of their steel from local manufacturers, and 10% from Canada. However, Ford CEO Jim Farley reportedly said the company still has suppliers with international sources for aluminum and steel, so tariffs may impact prices.
If you want a European car model, you may also expect higher prices. The European Union announced it would respond with reciprocal tariffs if it comes to it.
Bottom line on aluminum and steel tariffs
While the Trump administration’s move to impose across-the-board 25% tariffs may be a tactic to isolate China, it could have immediate implications for your daily finances.
Tariffs on imported goods from other countries and allies are taxes paid by domestic companies. These companies, like Coca-Cola, then pass on some of that additional cost to consumers like you so they can make a profit.
Trump’s tariffs on steel and aluminum should go into effect March 12, so stay tuned for developments as they may impact you sooner than you think.
For more information and live updates, follow our tax team on Filing Taxes 2025: Live Updates, Tax Tips, and Strategies from Kiplinger.
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