The announcement of new tariffs on steel and aluminum by President Donald Trump is likely to lead to higher prices for various consumer goods, including refrigerators, beers, and bicycles. This economic measure, set to take effect next month, imposes a 25% tax on all foreign steel and aluminum, echoing a policy from Trump's first term.
Trade experts predict that these tariffs will increase prices for products made from these metals, as importers typically pass the additional costs down the supply chain to retailers and ultimately to consumers. This economic impact could manifest within three months to a year, according to Kyle Handley, a professor of economics at the University of California, San Diego.
In response to inquiries from ABC News, the White House stated that the tariffs are part of a strategy to boost economic performance. White House spokesperson Kush Desai emphasized that President Trump aims to level the playing field and foster growth for American industry and workers through the use of tariffs.
Steel is a primary component in cars, comprising about 60% of a vehicle's weight, according to the American Iron and Steel Institute. With the implementation of tariffs, the cost of steel for U.S. manufacturers is expected to rise, leading to higher consumer prices for cars and trucks. Ford CEO Jim Farley mentioned the potential for increased costs and chaos due to these tariffs.
Aluminum tariffs may result in increased prices for beverages packaged in aluminum cans, such as beer and soft drinks. The Beer Institute reported that previous tariffs on aluminum cost the U.S. beverage industry $1.7 billion between 2018 and 2022. Coca-Cola CEO James Quincey indicated a possible shift to alternative packaging materials if aluminum prices continue to rise.
Major home appliances, like refrigerators and washing machines, rely significantly on steel, making them susceptible to price hikes. Jason Miller, a professor of supply chain management at Michigan State University, noted past price increases of 5% to 10% for major appliances following earlier tariffs.
The construction of bicycles heavily depends on steel and aluminum, increasing the likelihood of higher prices. Trade organization People For Bikes has expressed concern about the impact of these tariffs, especially those affecting goods from Canada, Mexico, and China.
The new tariffs on steel and aluminum are poised to affect a range of consumer goods, potentially leading to higher prices across multiple industries. As companies navigate these changes, consumers may feel the financial impact in the coming months.
