Published
November 17, 2025
The new tariffs imposed this year have thrown a wrench in the gears of U.S. manufacturing (as discussed in Part 1). Particularly harmful are the 50% tariffs on steel and aluminum. These new taxes have sent the U.S. price of steel to levels twice as high as other markets, and aluminum prices have soared in lockstep with the tariffs.
Why are these tariffs so damaging?
- Much Steeper Duties: The 50% rate in force today is twice as high for steel—and five times as high for aluminum—as was first imposed in 2018.
- No Country Carveouts: The duties today are applied globally. They were first applied in 2018, but Canada and Mexico secured a partial exemption in May 2019, and the EU, Japan, and some others also benefited from “tariff-rate quotas” that allow duty-free imports up to a limit. None of this exists today.
- No Exemption Process: Under the 2018 tariffs, U.S. companies could apply for exemptions to the tariffs for metal products not readily available except by import. More than 109,000 exemptions were granted during the first Trump administration, but these exemptions—and the process for seeking them—are all gone.
It’s worth noting that steel and aluminum come in a variety of highly-specialized forms, many of which are completely unavailable from domestic sources—or if they are, they are not available in sufficient quantities or reasonable prices. These include:
- Tinplate for canning vegetables: U.S. production has declined despite tariffs, and canners have no choice but to pass tariff costs on to consumers, as the American Action Forum has found.
- Tubular goods for oil and gas production: Tariffs have sent costs soaring for energy production, a sector that is one of the largest users of steel—complicating the administration’s “energy dominance” agenda.
- Gear blanks, cutting edges, aircraft parts: Some of these products are so specialized that only one or two facilities in the world are capable of producing the metals they need—and there’s no chance tariffs will meaningfully incentivize the “onshoring” of such low-volume production.
The tariffs’ harm to U.S. manufacturing broadly is significant. Higher input costs mean not just higher prices for consumers but reduced resources available for manufacturers to raise wages or invest in new equipment and R&D. It’s a hit to the competitiveness of U.S. manufacturers exporting their goods to international markets. Productivity suffers, too: Far from boosting manufacturing, the Minneapolis Fed writes that tariffs and trade wars act like an interest rate hike, lowering demand for capital.
At the end of the day, these tariffs—intended to boost one small part of the manufacturing base—wind up hurting the broader industrial ecosystem.
DIG DEEPER: More on tariffs
PART 1: How Tariffs Risk Hollowing Out American Manufacturing
COMING SOON: The Special Case of Canadian Aluminum
About the author
John G. Murphy
John Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy and regularly represents the Chamber before Congress, the administration, foreign governments, and the World Trade Organization.
