Steel and Aluminum Tariffs: Comparing 2018 to 2025

In March 2018, President Trump imposed 25 percent tariffs on steel and 10 percent on aluminum imports. The tariffs were part of the administration’s broader trade policy, designed to boost domestic manufacturing and reduce trade imbalances. The justification was national security, arguing that a strong domestic steel and aluminum industry was vital for military and defense needs. 

Impact of the Trump Tariffs

Imports

The tariffs led to an immediate drop in steel and aluminum imports from many countries. For example, in 2018, the U.S. imported a total of 30.6 million metric tons of steel, 11.3 percent lower than in 2017 (Figure 1).

The downward trend continued in 2019 as total steel imports for consumption fell by an additional 17.3 percent from the previous year, reaching 25.3 million metric tons. While imports from China fell from 2018 to 2021, it is a different story for key allies like Canada, which was no longer on the tariff list after negotiations with the U.S. in 2020 (Figure 2).

Price Increases

As domestic production of steel and aluminum increased, so did prices. In the U.S. market, prices for steel and aluminum increased 5 and 10 percent, respectively, according to Reuters. While U.S. steel and aluminum producers benefited from reduced foreign competition, downstream industries, such as automotive and construction, faced higher input costs, leading to increased prices for consumers. Jim Farley, CEO of Ford Motor Company, has stated that the 2018 tariffs on steel and aluminum imports resulted in approximately $1 billion in additional costs for the company. A study by the Peterson Institute for International Economics (PIIE) suggested that U.S. consumers paid an additional $1.4 billion per month as a result of the tariffs on steel and aluminum.

Domestic Production

U.S. raw steel production did increase, from 95 million net tons (NT) in 2018 to 96.7 million NT in 2019. According to data from the U.S. Bureau of Labor Statistics (BLS), employment in the  “Iron and Steel Mills and Ferroalloy Manufacturing” sector (NAICS 3311) was approximately 84,100 in 2018, and rose to approximately 87,300 by March 2019, indicating an increase of around 3,200 jobs. However, the overall impact on domestic manufacturing jobs is likely to be mixed. While some sectors experienced modest job growth, others—particularly those more sensitive to tariff increases—could face job losses, though these effects are likely influenced by a variety of factors beyond just the tariffs.

New Trump Tariffs: What’s Likely to Continue?

On March 12, 2025, following President Trump’s return to office, a new round of 25 percent tariffs on steel and aluminum imports took effect, with no exemptions for key allies like Canada, Mexico, or the European Union. While similar in nature to the 2018 tariffs, the global reach of the 2025 tariffs could have more profound effects on industries and trade relations.

The world has seen a similar story before, and past evidence allows us to approximate the effects of the current decree by resembling the impact of the 2018 example.

• First, we can expect boost prices and profit margins for U.S. steel and aluminum manufacturers.
• Second, increased costs and potential job losses in industries dependent on steel and aluminum will likely mirror what we’ve seen in the past.

Example: Texas, being a major industrial hub, accounts for the largest portion of the nation’s steel and aluminum imports. As a result, developers here could see overall increases in the cost of materials such as steel beams, roofing, and HVAC systems. This could particularly impact consumers (for example, first-time homebuyers) as any rise in construction costs is likely to be passed on to consumers, further straining affordability.

What’s Different?

Increased global overproduction and ongoing trade disputes may exacerbate supply chain disruptions and price volatility, making the situation more complex than in 2018.

• Unlike in 2018, businesses now have fewer options for negotiating tariff exemptions. As Iacob Koch-Weser, associate director, global trade and investment at Boston Consulting Group, notes, businesses now have limited options: they must either source materials domestically or bear higher costs for imported products. Shifting supply chains to other countries becomes less effective since all nations are subject to the same tariffs.
• The 2025 tariffs are more broadly applied, including new derivative products that were not covered in 2018 (e.g., elevator parts, bulldozer blades, and structural steel). This could mean a wider range of retaliatory measures across industries globally, affecting both high-value and commodity sectors. 

Ultimately, these tariffs are a tricky balancing act between supporting U.S. industries and dealing with the wider economic effects. Future negotiations, political shifts, or economic developments could lead to modifications, exemptions, or even reversals of these tariffs, which could alter the effects on U.S. and Texas markets. Moving forward, businesses, consumers, and policymakers will need to carefully navigate this complex situation.