Back to Blogs

Impact of Steel and Aluminum Tariffs: A Data-Driven Analysis

Summary

The Section 232 tariffs on steel (25%) and aluminum (10%) implemented from 2018 onward have had mixed effects on different stakeholders. U.S. metal producers initially benefited from higher prices, expanded production, and record profits in 2018 (Nucor profit jumps on higher steel tariff, strong demand | Reuters) (Nucor profit jumps on higher steel tariff, strong demand | Reuters). However, downstream industries faced increased input costs, leading to higher prices for manufacturers and consumers and, in some cases, layoffs and lost business (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet) (Trump metals tariffs will cost Ford $1 billion in profits, CEO says). While the tariffs achieved a reduction in metal imports – U.S. steel imports fell by roughly one-third by 2019 (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute) – the broader economic impact includes only modest gains in primary metal employment and a drag on metal-using sectors (Fact Check: Did the 2018 steel tariff make US steel production more profitable? | Econofact) (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser). Government tariff revenues ran in the billions, but studies estimate the cost per job saved in steel exceeded $650,000 (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024). As of 2024, the tariffs (now partly administered via quotas for allies) remain U.S. policy, and debate continues over their long-term effectiveness versus the collateral damage to consumers and other industries. Below, we detail the impacts on producers, consumers, major players, jobs, and the overall economy, using the latest data and research.

1. Introduction: Context & Policy Overview

In early 2018, the U.S. government imposed sweeping tariffs on imported steel (25%) and aluminum (10%) under Section 232 of the Trade Expansion Act of 1962 (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)). These tariffs were justified on national security grounds – the administration argued that surging metal imports had weakened U.S. producers critical for defense and infrastructure (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute) (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute). This move was unprecedented in recent history; Section 232 had rarely been used for broad tariffs, with the last major action in 1986 (on machine tools) and a notable prior use being President Bush’s 2002 steel tariffs (which were a temporary safeguard under a different statute and were lifted after 20 months) (2002 United States steel tariff - Wikipedia) (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024).

Key measures: The tariffs, announced in March 2018, initially applied globally – affecting nearly all foreign suppliers including close allies (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)). Steel imports faced a 25% duty and aluminum imports 10%, with only temporary exemptions for Canada, Mexico, and the EU that expired by June 2018 (Nucor profit jumps on higher steel tariff, strong demand | Reuters). Certain countries later negotiated alternatives: for example, South Korea agreed to a quota limiting steel exports to the U.S., and by 2021 the EU, UK, and Japan reached deals to replace tariffs with tariff-rate quotas (TRQs) (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)) (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)). Under these TRQs, a set volume of metal from those partners can enter tariff-free, after which the 25%/10% duties apply (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)). Neighboring Canada and Mexico, initially hit by the tariffs, were exempted in May 2019 after a separate agreement, removing those duties but maintaining measures to prevent Chinese transshipment (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)).

Rationale: Beyond national security, the tariffs were part of a broader strategy to address trade imbalances and global overcapacity. U.S. officials highlighted that countries like China (and others) had built massive excess steel capacity, often state-subsidized, leading to global gluts and unfairly low prices (U.S. Section 232 tariffs lifted the steel industry—and should be continued: New study shows steel import measures benefited workers and created jobs | Economic Policy Institute). The goal was to pressure foreign producers and boost U.S. mills’ utilization rates above 80%, a level considered necessary for industry health (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute). The Commerce Department’s 2018 Section 232 report projected that cutting steel imports from 36 million metric tons (2017) to ~23 million could enable U.S. mills to reach 80% capacity utilization (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute). Indeed, after the tariffs, U.S. steel capacity use did rise above 80% in 2018 (Adjusting Imports of Steel into The United States - The White House), though this proved temporary as we’ll examine.

Retaliation: The tariffs provoked swift countermeasures from trading partners. In mid-2018, the EU retaliated against roughly €2.8 billion of U.S. exports, including iconic products like Harley-Davidson motorcycles, Kentucky bourbon, and Florida orange juice (Explainer: What are the EU's options in response to Trump tariffs? | Reuters). Canada and Mexico likewise imposed tit-for-tat tariffs on American goods (from steel and aluminum to agricultural products) until the 2019 deal. China, as part of a broader trade war, levied tariffs on U.S. exports such as soybeans and pork, sharply reducing those exports in 2018–2019. By one estimate, retaliatory tariffs resulted in annual lost U.S. export sales of over $13 billion, especially hitting the farm sector (Biden and Europe remove Trump's steel and aluminum tariffs, but it's ...). These counter-tariffs signaled that the cost of protection would extend beyond metals.

Timeframe and latest updates: This analysis covers the period 2017 through 2025, encompassing the tariffs’ implementation, their evolution, and outcomes to date. Notably, while the Biden administration in 2021 eased tensions with allies via quota arrangements, it maintained the core tariffs as leverage against global excess capacity (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)). In late 2023, the U.S. extended the EU steel and aluminum TRQ system through 2025, and in turn the EU is suspending its retaliatory tariffs on U.S. goods until at least early 2025 (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)) (Steel, Aluminum Quotas Extended, EU Retaliatory Tariff Suspension to Continue: CLA (CliftonLarsonAllen)). As of 2024, the Section 232 measures are still in effect on most countries (with quotas or exemptions for some allies), and discussions continue for a longer-term “Global Arrangement” to address both overcapacity and carbon emissions in metal production. The stage is set to examine how these policies have impacted producers, consumers, industry players, jobs, and the broader U.S. economy over the past several years.

2. Market & Financial Impact on Steel & Aluminum Producers

Domestic producers’ performance: U.S. steel and aluminum makers were immediate beneficiaries of the tariffs. With foreign competition curtailed by the 25%/10% duties, domestic suppliers gained pricing power. U.S. steel prices jumped – hot-rolled steel coil, a benchmark, surged to about $920/ton by mid-2018, up from ~$714 a ton before the tariffs (Nucor profit jumps on higher steel tariff, strong demand | Reuters). Major U.S. steel firms saw a sharp rise in revenue and profit margins as a result. Nucor Corp, the nation’s largest steel producer, reported that its average steel selling prices in 2018 were 21% higher than the prior year (Nucor profit jumps on higher steel tariff, strong demand | Reuters). This contributed to Nucor’s record earnings of $2.36 billion in 2018, up from $1.32 billion in 2017 – an ~80% increase (Nucor Reports Record Annual Earnings for 2018). The company celebrated 2018 as a “record year” with record shipments and revenues (Nucor profit jumps on higher steel tariff, strong demand | Reuters). U.S. Steel Corporation (U.S. Steel) likewise swung to a robust profit in 2018: it earned $1.1 billion net that year, after struggling with losses in prior years (united states steel corporation reports fourth quarter and full-year ...).

Aluminum manufacturers experienced a similar boost. The tariffs helped raise U.S. primary aluminum prices and revive domestic smelting operations. Century Aluminum, for example, announced it would restart idled capacity at its Kentucky smelter thanks to the tariff protection – restoring about 300 jobs and ramping up output (Steel and Aluminum Tariffs Are Already Creating American Jobs). By the end of 2018, a total of seven primary aluminum smelters were operational (up from five in 2017), with restarts and production increases “creating over 1,000 new jobs” in the aluminum industry according to one analysis (Aluminum tariffs have led to a strong recovery in employment ...). Alcoa, a leading U.S. aluminum producer, saw improved market conditions as import competition eased, though it also had to navigate higher input costs for raw alumina. Across steel and aluminum, higher domestic prices translated into improved capacity utilization – U.S. steel mills operated at over 80% capacity in 2018 (a level last seen years prior) (Adjusting Imports of Steel into The United States - The White House), and aluminum smelter utilization rose from around 40% in 2017 to 60% by 2019 (Trump Imposes Sweeping Steel and Aluminum Tariffs, Sparking ...).

Profitability and investment: With fatter margins, U.S. metal producers ramped up investment in facilities and capital improvements. Nucor’s CEO credited the tariffs for enabling the company’s plans to build new plants, including a $1 billion steel plate mill in Brandenburg, KY (Nucor CEO: Trump tariffs enabled us to build new billion-dollar plant). U.S. Steel reopened blast furnaces at its Granite City, IL works, calling back hundreds of laid-off workers. Steel Dynamics Inc. and other firms likewise announced mill projects in 2018–2019 amid the optimism. The stock market initially rewarded these industries: steel company shares rose following the tariff announcement (Nucor’s stock jumped ~3% on the news and was up 14% year-to-date by early 2019 (Nucor profit jumps on higher steel tariff, strong demand | Reuters)). Investors anticipated sustained benefits from the protected market.

However, the boom for producers tempered over time. After the initial price spike, global steel prices cooled in 2019, and domestic prices fell from their 2018 highs. By late 2019, U.S. Steel’s fortunes had reversed – the company reported that full-year 2019 adjusted net earnings collapsed to just $15 million, down from over $1.1 billion in 2018 (U.S. Steel Witnesses Net Loss in 2019 - Metal Center News). This was due to declining steel prices and slowing demand, which forced U.S. Steel to idle some capacity (one of its Michigan blast furnaces was temporarily shut in 2019). Nucor remained profitable in 2019 but saw earnings pull back from record levels as steel prices and mill margins normalized. The COVID-19 pandemic in 2020 then dealt a further blow, with steel demand briefly plummeting (capacity use fell to ~50% in spring 2020) ([PDF] U.S. Steel Manufacturing: National Security and Tariffs - CRS Reports). Ironically, by 2021 a global commodity rebound sent steel prices soaring to all-time highs (far above 2018 levels), which gave U.S. producers another windfall – though that price surge was driven more by post-pandemic supply/demand imbalances than by the tariffs.

International producers: Foreign steel and aluminum companies faced diminished access to the lucrative U.S. market. Some, like ArcelorMittal (a global steel giant with significant U.S. operations), adjusted by redirecting exports elsewhere or focusing on their American subsidiaries. Countries with quota agreements (e.g. South Korea for steel) maintained volume but couldn’t exceed agreed limits, ceding potential market share to U.S. mills. The tariffs particularly impacted producers in the EU, Canada, Mexico, China, and others who collectively had supplied millions of tons of metal to the U.S. annually. In response, a few foreign-owned firms chose to invest in U.S. production to avoid tariffs – for instance, Japan’s Toyota and Novelis (an aluminum maker) expanded U.S. materials plants to source locally. Overall, though, foreign metal producers were on the losing end of the policy, especially in 2018–2019 when their U.S. export volumes fell sharply (U.S. steel imports dropped from 34.6 million metric tons in 2017 to 25 million in 2019) (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute).

Pricing and sourcing strategies: One consequence of the tariffs was a change in pricing dynamics. U.S. producers no longer had to match the lowest global prices; they could charge more, roughly up to the import price plus tariff. In fact, studies found that domestic suppliers captured much of the tariff’s value as profit rather than the cost being fully absorbed by foreign exporters. For example, in the aluminum can sheet market, it’s estimated that only ~8% of the tariff costs went to the U.S. Treasury, while over 90% was effectively added to domestic producers’ revenue via higher prices (Aluminum tariffs have cost US beverage industry $1.4 Billion: Beer Institute). This indicates U.S. producers leveraged tariff protection to raise prices for domestic buyers, improving their margins (as intended by the policy). In terms of raw material sourcing, some steelmakers that relied on imported slabs or specialized aluminum had to seek alternate sources or apply for exclusions. The Commerce Department set up an exclusion process for cases where domestic supply was insufficient. Over 100,000 exclusion requests were filed by various companies, and many were granted, tempering the impact for certain niche producers. Still, the overall landscape for 2018–2025 has been one where U.S. steel and aluminum producers enjoy higher average selling prices and periodic profit surges, albeit with normal business cycles and external shocks influencing results beyond the tariffs. By 2023, U.S. steel output was approximately back to pre-tariff levels (around 80 million tons, similar to 2017) (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute), suggesting that the tariffs’ boost to production did not sustain permanent growth in volume – though it did support producer finances in the interim.

3. Impact on Consumers & Downstream Industries

While primary metal producers benefited from tariffs, manufacturers who consume steel and aluminum faced higher costs. These downstream industries – including automotive, aerospace, construction equipment, appliances, canned goods, and machinery – suddenly had to pay more for raw materials or semi-finished inputs. Many suppliers raised prices in line with the tariffs. For instance, right after the tariffs, U.S. flat-rolled steel prices climbed ~20%, directly impacting automakers and other steel-intensive manufacturers (Nucor profit jumps on higher steel tariff, strong demand | Reuters). Heavy-equipment maker Caterpillar noted that steel costs for the industry were up about 15% in the first quarter of 2018, and by 2019 Caterpillar had paid tens of millions of dollars in tariffs on metal (Caterpillar shares slide; Trump steel tariffs may boost costs - Reuters). The company said it would raise its product prices to offset these higher input costs (Caterpillar to raise prices due to Trump tariffs on aluminum and steel). Likewise, Ford Motor Company estimated that the steel and aluminum tariffs added roughly $1 billion in additional costs – a hit to its profits over 2018–2019 (Trump metals tariffs will cost Ford $1 billion in profits, CEO says). Ford’s CEO warned that these higher costs made their vehicles more expensive to manufacture, creating “a lot of cost and a lot of chaos” in their supply chain (Ford CEO decries cost and chaos of Trump tariffs - Reuters).

The question of how much of these cost increases were passed on to consumers varied by industry. In some cases, manufacturers accepted lower margins (at least temporarily) to avoid losing sales. In others, they raised end-product prices. For example, the price of a new washing machine in the U.S. jumped about 12% in 2018, which analysts attribute to a combination of steel costs and a separate tariff on imported washers – a clear instance of consumers paying more due to trade barriers. New car prices were also under pressure. Industry analysts estimated that the metal tariffs could add a few hundred dollars to the cost of an average vehicle (one Barron’s analysis even warned of up to $2,000 per vehicle in a worst-case scenario (Here's How Much Trump's Steel Tariffs Could Raise Car Prices), though in reality automakers worked to mitigate that). The construction sector felt the pinch as well – higher prices for steel beams, rebar, and aluminum siding made projects more expensive. Some contractors had bid projects before tariffs and then saw their material costs spike, squeezing their profit or forcing contract adjustments.

Many downstream firms sought ways to adapt: some switched suppliers (e.g. sourcing more from domestic mills to avoid tariffs on imports, albeit at higher domestic prices), while others explored substitute materials (such as using composites or plastics in place of metal where feasible). A few could shift production abroad – for instance, if a U.S. manufacturer had a plant overseas, they might import finished parts rather than raw metal to bypass the tariffs on materials (though this wasn’t an option for all). The tariff exclusion process provided limited relief for certain specialized inputs not made in the U.S., but the approval backlog was long (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet), and many businesses couldn’t count on timely exemptions.

Specific consumer-facing industries were notably affected:

  • Beverage and packaging companies: Aluminum tariffs increased the cost of aluminum cans. The Beer Institute reports that from 2018 to early 2022, the U.S. beverage industry paid $1.4 billion in tariffs on imported aluminum, costs that ultimately drive up beer and soda prices (albeit by fractions of a cent per can) (Aluminum tariffs have cost US beverage industry $1.4 Billion: Beer Institute). By 2023, the cumulative tariff bill for beverage makers reached nearly $2.2 billion (Beer Institute Lauds Introduction of Bill to Prevent Unfair Tariff ...). These added costs tend to get passed to consumers in the form of slightly higher prices for canned drinks.
  • Aerospace: Aircraft manufacturers like Boeing rely on high-grade aluminum and specialty metals. Tariffs increased their materials costs, potentially affecting their price competitiveness against foreign rivals (like Airbus, which wasn’t bearing those U.S. tariff costs for its European production).
  • Appliances: Companies such as Whirlpool benefited from separate appliance-specific tariffs but also had higher steel costs for making refrigerators, ovens, etc. In some cases, the net effect still favored them (Whirlpool initially praised the trade measures), but consumers saw appliance price inflation in 2018–2019.
  • Agricultural equipment: Firms like John Deere and tractor manufacturers paid more for steel parts, which can lead to more expensive farm equipment or lower profit margins for those companies.

Importantly, not all downstream price increases were dramatic. A report by the Economic Policy Institute (EPI) argued that there was “no meaningful real-world impact” on prices of steel-consuming products like motor vehicles through 2019 (U.S. Section 232 tariffs lifted the steel industry—and should be continued: New study shows steel import measures benefited workers and created jobs | Economic Policy Institute). Their reasoning is that steel is just one cost component, and strong market competition plus other factors (like 2018 tax cuts that boosted many companies’ bottom lines) may have absorbed some of the tariff impact. Indeed, consumer price index data show only modest upticks in overall inflation from these tariffs. The U.S. International Trade Commission (USITC) found that the Section 232 measures raised domestic steel prices by an average of 2.4% and aluminum prices by 1.6% (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024). These percentages, while significant for the industries, translated into relatively small changes in final goods prices. For example, a 2.4% rise in steel cost might add only a few hundred dollars to a $30,000 car (much less than normal price fluctuations due to other factors).

Competitiveness and market shifts: Some U.S. manufacturers complained that the tariffs made their products less competitive internationally. A domestic tool manufacturer, for instance, paying more for steel, might have to charge higher prices for its tools, losing sales to foreign competitors who can buy steel more cheaply. There were reports of U.S. companies losing contracts to foreign firms because the foreigners could source cheaper steel/aluminum. In extreme cases, companies warned they might relocate production outside the U.S. to access world-priced metals. The most prominent example was Mid-Continent Nail Corp, America’s largest nail manufacturer, based in Missouri. Hit by the 25% steel tariff on the wire rods it buys, Mid-Continent’s costs soared. The company raised prices, and customers fled to cheaper nails from abroad (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet) (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet). Stories like this illustrate the pain felt by downstream businesses with slim margins that could not easily pass costs along.

In summary, consumers and downstream industries largely fell on the losing side of the tariffs. They encountered higher input prices that, in many cases, translated into higher prices for finished goods or squeezed profits and payrolls. While some final price increases were small in percentage terms, the absolute dollar impact across the economy was substantial (billions in costs). And for certain firms and workers (like the Missouri nail factory employees, or Midwest farmers facing retaliatory tariffs on their exports), the tariffs brought very tangible economic harm. The downstream effects underscore the inherent trade-off of the policy: protecting one sector (metal producers) effectively taxes all the industries that buy from that sector, with a diffuse but real impact on consumers nationwide.

4. Impact on Major Players: Winners & Losers

Trade policies inevitably create winners and losers. The steel and aluminum tariffs are no exception, effectively redistributing income within the economy. Here we identify which firms, industries, or stakeholders benefited from the tariffs and which were hurt, with examples to illustrate these outcomes.

Winners

  • Domestic Steel Producers: U.S. steelmakers are the clearest winners. Companies like Nucor, U.S. Steel, Steel Dynamics, and Cleveland-Cliffs enjoyed higher prices and a resurgence in demand for domestic steel. The tariffs allowed them to regain market share lost to imports. Nucor’s record $2.3 billion profit in 2018 was directly aided by the 25% import tax that pushed its steel prices ~21% higher (Nucor profit jumps on higher steel tariff, strong demand | Reuters). U.S. Steel, after years of volatility, saw a brief return to billion-dollar profits in 2018 (united states steel corporation reports fourth quarter and full-year ...). The industry’s capacity utilization climbed above the long-sought 80% benchmark (Adjusting Imports of Steel into The United States - The White House), and shipments from U.S. mills increased ~5% in the year after tariffs (One Year Later: 2019 Steel and Tariffs Outlook). These companies also embarked on new investments and expansions. For example, Cleveland-Cliffs (an iron ore producer turned steelmaker) credited the favorable environment in part for its decision to acquire major steel facilities (AK Steel in 2019 and ArcelorMittal USA in 2020), betting on the long-term viability of domestic steelmaking. The tariffs effectively provided breathing room and better margins for U.S. mills to modernize or reopen.

  • Domestic Aluminum Producers: U.S. primary aluminum smelters and downstream aluminum extruders benefited similarly. Century Aluminum, which had been struggling against low-priced imports, announced the restart of its Hawesville smelter potlines and the creation of 300 jobs in Kentucky thanks to the 10% aluminum tariff (Steel and Aluminum Tariffs Are Already Creating American Jobs). Magnitude 7 Metals reopened an aluminum smelter in Missouri (New Madrid) in 2018, which had been previously shuttered. Alcoa saw improved conditions for its U.S. operations. The aluminum industry as a whole experienced a “strong recovery in employment,” with restarts and expansion projects in 2018 leading to over 1,000 new jobs and more capacity online (Aluminum tariffs have led to a strong recovery in employment ...). Although high electricity costs and other challenges remain for U.S. aluminum, the tariffs undeniably gave domestic smelters a short-term boost and a chance to recapture domestic market share.

  • Metal Industry Workers (to an extent): Workers in steel mills and aluminum plants benefited from a more robust industry. Layoffs were reversed in some cases, and new hiring took place in facilities that expanded or reopened. The United Steelworkers union noted that the tariffs were “already creating American jobs” in mid-2018, citing examples like Granite City (IL) where 500 steel jobs were reinstated and the Century Aluminum reopening (Steel and Aluminum Tariffs Are Already Creating American Jobs). Wages in these industries also saw upward pressure as companies grew profits (though the effect on wages is less documented than on employment). It’s important to note, however, that these gains, while real, were relatively small in absolute terms (a few thousand jobs – see the Employment section for context).

  • U.S. Government (Tariff Revenue): The tariffs generated revenue for the U.S. Treasury on every ton of metal imported. In effect, they acted as a tax on importers. Based on 2018 import levels, the 25% steel tariff could raise roughly $9 billion per year and the aluminum tariff around $1.8 billion (Trump Tariffs: The Economic Impact of the Trump Trade War) (though exemptions and reduced import volumes meant actual collections were a bit lower). For example, from 2018 through 2021, the federal government collected several billion dollars from steel and aluminum tariffs (one analysis pegged the annual revenue around $2.2 billion in recent years after adjustments) (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024). This money goes into the Treasury and partially offset the 2017 tax cuts’ revenue loss. While tariff revenue isn’t usually a primary goal (and 92% of the aluminum tariff cost was passed to producers/others as noted, with only 8% reaching the Treasury (Aluminum tariffs have cost US beverage industry $1.4 Billion: Beer Institute)), it’s still a financial gain for the government that can be considered a “win” in budget terms.

  • Domestic Suppliers of Raw Materials: Indirectly, those who supply inputs to steel/aluminum producers saw benefits. For instance, U.S. iron ore mines (in Minnesota and Michigan), which supply taconite pellets to domestic steel mills, experienced increased demand as U.S. steel production rose. Cleveland-Cliffs, the major U.S. ore producer, noted stronger sales to domestic mills when imports declined. Scrap metal recyclers also benefited – higher domestic steel production meant more need for scrap, raising its price. The tariffs also may have encouraged domestic supply chain investments; some foreign companies decided to build facilities in the U.S. (for example, an Austrian company opened a steel plant in Texas in part to be inside the tariff wall). These upstream and ancillary industries enjoyed a ripple effect from the domestic metals revival.

Losers

  • Manufacturers Dependent on Imported Metals: Companies that heavily relied on importing steel or aluminum (because of cost or lack of domestic availability) were hit hard. The Mid-Continent Nail Corporation case in Missouri is a prime example. Their nails require specific steel wire rod, which they had sourced from Mexico; the 25% tariff drove up their costs, forcing layoffs of nearly one-third of their staff and pushing the firm to the brink of closure unless they got an exclusion (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet) (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet). Another example is Precision Products, a fictional but representative small auto-parts maker that imports specialty steel not produced domestically – it saw its materials bill skyrocket and had to either raise prices (losing orders) or eat the costs (turning profits to losses). Even big companies like Caterpillar and Deere, which import some steel/aluminum parts or raw materials, faced tens of millions in extra costs, as noted earlier, squeezing their margins and leading them to raise equipment prices. Across the board, studies found that steel-using manufacturing industries suffered. The Federal Reserve found that sectors exposed to input tariffs had significant job losses and lower output relative to those that weren’t (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser) (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser).

  • Consumers (Higher Prices): American consumers indirectly paid for the tariffs through higher prices on goods – making them a “loser” in aggregate, though the impact per person was often small. As detailed, items like cars, appliances, canned foods, and even craft beer became marginally more expensive due to higher metal costs. One study calculated that the cost to consumers for each job saved in the steel industry was on the order of $650,000 per year in higher prices and tax costs (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024). Another analysis estimated that for every $1 of tariff collected, consumers paid much more (with domestic firms capturing a chunk). While the broader inflation effect was modest, certain durable goods saw noticeable price hikes in 2018–2019 partly attributable to these tariffs. Thus, everyday people buying a car or a six-pack of beer bore a hidden tax. The tariffs also created inconveniences – e.g. a builder might delay a project because steel supplies were tight or costly, which could affect homebuyers waiting for a new house.

  • Exporters Facing Retaliation: Many U.S. companies and farmers became collateral damage when other countries retaliated. A prominent victim was the American whiskey industry (particularly bourbon). The EU’s 25% retaliatory tariff on U.S. whiskey (imposed mid-2018 in response to steel tariffs) caused American whiskey exports to the EU to plunge. Distillers reported a double-digit percentage drop in those sales; for example, U.S. whiskey exports to the EU fell by roughly 37% between 2018 and 2020 under the tariff ([PDF] U.S.-EU-UK Tariffs on Distilled Spirits and Wines: Timeline and Impact). Iconic motorcycle maker Harley-Davidson was hit by the same EU retaliation (25% on U.S. bikes), which raised the cost of Harleys in Europe by about $2,200 each. To avoid this, Harley announced it would shift some production for the EU market to its overseas facilities – a decision that drew the ire of U.S. politicians but was necessary to maintain its EU business. U.S. farmers arguably suffered the most widespread harm from retaliation: China’s tariffs on U.S. soybeans effectively shut U.S. farmers out of their largest export market in late 2018, causing soybean exports to China to drop by over 70% and resulting in a glut and price crash. The U.S. government had to step in with bailout payments (over $25 billion in 2018–2019) to compensate farmers for lost sales. Other agriculture sectors like pork, dairy, and fruit also lost export value due to retaliatory duties by China, Mexico, and Canada. In sum, the tariffs unleashed a chain reaction that hurt U.S. exporters in unrelated industries, making them significant losers in terms of revenue and market access.

  • Foreign Steel and Aluminum Producers: Although not U.S. stakeholders, it’s worth noting that foreign metal producers (from China’s Baowu Steel to Germany’s Thyssenkrupp or Canada’s aluminum smelters) lost business. Some had to cut production or redirect to other markets, often at lower profits. For instance, Canadian aluminum which normally would go to the U.S. had to find other buyers during 2018–2019 until Canada’s exemption, causing a supply glut and lower prices for Canadian producers. European steelmakers faced quotas and still cannot freely export high volumes to the U.S. without incurring tariffs, limiting their growth in what was a key market. These foreign companies, while not the focus of U.S. policy concerns, undeniably were hurt by the tariffs – which was partly the point, to pressure their governments into negotiating (which did happen in some cases).

Case studies – a recap: A clear “winner” case is Nucor Corporation: It thrived under tariffs with record profits (Nucor profit jumps on higher steel tariff, strong demand | Reuters), expanded operations, and its shareholders and workers benefited from the protection. A clear “loser” case is Mid-Continent Nail: a company that nearly went under because it couldn’t survive the increased cost of its raw steel (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet) (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet). Another loser example, Harley-Davidson, illustrates how even an iconic manufacturer not directly tied to steel/aluminum can be harmed via retaliation, leading it to outsource production (arguably a loss for U.S. manufacturing jobs and an unintended consequence of the steel tariffs). The distribution of winners and losers highlights the trade-offs inherent in the tariff policy – concentrated gains for the metal sector and government coffers, versus dispersed costs to a wide swath of industries and consumers, as well as blowback on unrelated export sectors.

5. Employment & Workforce Effects

One of the key aims of the tariffs was to boost employment in the steel and aluminum industries. So, did it work? The answer is partially yes – but with important caveats and offsetting losses elsewhere.

Jobs in steel and aluminum production: There were measurable job gains in primary metal manufacturing following the tariffs. U.S. Bureau of Labor Statistics data shows that iron and steel mills (NAICS 3311) added roughly 4,800 jobs between March 2018 and March 2019 (Fact Check: Did the 2018 steel tariff make US steel production more profitable? | Econofact). This aligns with reports of mills restarting and hiring workers. In percentage terms, steel mill employment grew only a few percent, but after years of decline, even this small uptick was touted as a success. By one estimate, the Section 232 steel measures “directly created 3,200 new steelmaking jobs” by early 2021 (U.S. Section 232 tariffs lifted the steel industry—and should be continued: New study shows steel import measures benefited workers and created jobs | Economic Policy Institute). Aluminum smelter jobs also increased; for example, Century Aluminum’s Hawesville restart brought back 300 workers (Steel and Aluminum Tariffs Are Already Creating American Jobs), and Magnitude 7 Metals rehired around 400 at New Madrid, MO. All told, the aluminum industry saw around 1,000 jobs revived from various restarts (Aluminum tariffs have led to a strong recovery in employment ...). These numbers might seem modest, but given that primary aluminum smeltering is a small industry (only a few thousand workers nationwide), it was a significant percentage increase.

The quality of jobs in steel and aluminum is another consideration. These industries offer relatively high-paying manufacturing jobs (often unionized). Saving or adding such jobs can have positive ripple effects in local communities (each steel job can support additional jobs in services, etc.). The tariffs likely prevented some layoffs as well – it’s estimated they “kept a few thousand more [jobs] from disappearing” that might have been lost had import competition continued unabated (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser). So in terms of direct employment, steel towns like Granite City, IL; Middletown, OH; or Hawesville, KY saw tangible benefits in employment and economic activity from the policy.

However, employment in downstream industries moved in the opposite direction. Studies consistently found that any jobs gained in metals were offset many times over by jobs lost (or not created) in metal-using sectors. A frequently cited statistic: for every 1 steel job, there are about 80 jobs in industries that consume steel (Fact Check: Did the 2018 steel tariff make US steel production more profitable? | Econofact). So even a small cost increase in steel can impact a much larger workforce. The Federal Reserve Board study by Flaaen and Pierce (2019) quantified this: by mid-2019, U.S. manufacturing employment overall was 1.4% lower than it would have been without the 2018 tariffs, which translates to 175,000 fewer manufacturing jobs (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser). Within that, they attributed about 75,000 lost jobs specifically to the steel and aluminum tariffs (the rest due to the broader China tariffs and retaliation) (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser). This net figure already accounts for the jobs gained in steel/aluminum – meaning the losses in downstream industries outweighed the gains by a large margin (roughly 75,000 lost vs. 1,000 gained in metals, according to that study) (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser). Essentially, industries like fabricated metals, machinery, appliances, and transportation equipment ended up employing fewer people than they would have in a no-tariff scenario, due to higher input costs reducing their output and competitiveness.

Evidence on downstream job impacts: There are many anecdotes reinforcing the data. Besides the Mid-Continent Nail layoffs (160 jobs gone) (Missouri nail company cites Trump’s tariffs for additional layoffs - Missourinet), consider Autolite, a hypothetical auto parts plant in Ohio that might have scrapped an expansion because steel costs made their new product line unprofitable, or Precision Tool in Michigan laying off 20 workers because several contracts were lost to a German competitor who could source cheaper steel. On a larger scale, General Motors in late 2018 announced layoffs and cited in part a need to cut costs after commodity (including steel) prices rose. While GM’s decision was multi-factor (shifting consumer demand, etc.), it exemplified the pressure auto companies were under. The American Automotive Policy Council estimated the tariffs added billions in costs for U.S. automakers collectively, potentially affecting their employment levels or investment plans.

Regional effects: The tariffs’ job impacts were not uniform across the country. Steel-producing regions (the Great Lakes, parts of the South) saw job gains or stabilization. For example, the greater Pittsburgh area and Northwest Indiana (steel hubs) got a small employment boost. In contrast, areas heavy in manufacturing that uses steel – like the upper Midwest (auto plants in Michigan and Ohio, machinery in Wisconsin) – saw slower job growth than expected. An analysis by the Tax Foundation found that states like Michigan, Missouri, Illinois, and Wisconsin could end up with net job losses due to the tariffs, whereas steel-producing states like Indiana or Alabama might net out neutral or slightly positive.

Productivity and automation: It’s also worth noting that even within steel/aluminum, job growth was limited by ongoing productivity improvements. Modern steel mills (especially electric-arc furnaces) need fewer workers than old mills. Some tariff-enabled projects were more capital-intensive than labor-intensive. For instance, when U.S. Steel invested in a new electric arc furnace in Alabama, it improved efficiency but didn’t require as many workers as an older blast furnace operation would. Thus, the bump in output did not translate to a one-for-one bump in jobs – which is why we saw only a few thousand jobs added despite multi-billion-dollar increases in sales for steel companies.

Temporary vs. permanent jobs: Another consideration is the durability of the tariff-related jobs. Some that were added in 2018–2019 proved temporary. For example, the New Madrid, MO aluminum smelter that reopened in 2018 (about 400 jobs) closed again in January 2024 due to challenging economics (Beer, not tariffs, will boost US aluminium capacity - Reuters). U.S. Steel’s Granite City furnaces, restarted in 2018, were idled again a couple of years later when the company shifted strategy (and are slated for potential repurposing to less labor-intensive steel processing in the future). These swings show that unless protected industries become globally competitive on their own, jobs created under the tariff umbrella can be at risk if market conditions turn or if the tariffs are lifted.

In contrast, the jobs lost in downstream firms might be harder to get back. Once a factory closes or a contract is lost to overseas, those positions disappear and can’t be quickly recovered, even if tariffs were removed. The uncertainty around trade policy during 2018–2020 also dampened business investment broadly, which indirectly affects hiring. Companies unsure if tariffs would expand or persist delayed capital spending, which in turn meant fewer new jobs.

In conclusion, employment in the steel and aluminum sector ticked up by perhaps 5–10% (a few thousand jobs) thanks to the tariffs (Fact Check: Did the 2018 steel tariff make US steel production more profitable? | Econofact), but this came at the cost of jobs in downstream manufacturing – on the order of tens of thousands nationally – being forgone or lost (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser). The overall U.S. workforce didn’t see a net gain; rather, there was a reallocation, with some steelworkers back on the job at the expense of larger losses spread across manufacturing and farming. This trade-off has fueled debate: supporters argue those steel jobs are vital and would have vanished without action, while critics point to the much larger downstream job toll as evidence the policy did more harm than good to American workers overall.

6. Economic Impact: GDP, Inflation, and Trade Balance

Beyond specific industries, the steel and aluminum tariffs influenced macroeconomic indicators like GDP growth, inflation, and the trade balance, albeit modestly given the overall size of the U.S. economy.

GDP and growth: The direct impact of the metal tariffs on U.S. GDP was relatively small, but in the direction of a slight drag. Multiple analyses estimated the effect to be a few hundredths of a percent of GDP. For instance, the U.S. International Trade Commission’s economic model found the 232 tariffs would cause a less than 0.1% reduction in GDP in the long run (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024). The Tax Foundation’s model in 2024 calculated that repealing the steel and aluminum tariffs (and quotas) would boost long-run GDP by 0.02% (about $3.5 billion) (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024) (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024) – implying that their imposition had trimmed GDP by a similar amount. These are very small changes in the context of a ~$22 trillion economy (for perspective, 0.02% of GDP in 2023 is only a few billion dollars). Why so small? Because steel and aluminum, while crucial, are a relatively thin slice of the economy in value terms. The losses in downstream sectors and gains in metals mostly canceled out, and net GDP change was tiny.

However, some broader trade war dynamics intertwined with the 232 tariffs might have had bigger effects. The uncertainty and retaliatory measures likely dampened business confidence and investment in 2019. The Federal Reserve study we cited estimated manufacturing output was lower than it would have been sans tariffs. There’s also evidence that trade tensions contributed to slower growth globally in 2019. The IMF and OECD both cut global growth forecasts, partly blaming heightened trade barriers (Guest Contribution: “The Trade War Has Cost 175,000 Manufacturing Jobs and Counting” | Econbrowser). The U.S. economy in 2018 grew quite strongly (2.9%) thanks to tax cuts and fiscal stimulus, more than offsetting any tariff drag that year. By 2019, growth slowed to 2.3%, with trade issues and a manufacturing slowdown as contributing factors – though it’s hard to isolate the steel/aluminum tariff piece from the larger U.S.-China tariff fight.

Inflation: The steel and aluminum tariffs put upward pressure on prices, but the effect was concentrated in certain sectors and was moderate in aggregate. As mentioned, the USITC found domestic prices for steel were 2.4% higher and aluminum 1.6% higher due to the tariffs (Section 232 Tariffs on Steel and Aluminum: Economic Impact 2024). These increases fed into producer prices: for example, the Producer Price Index (PPI) for steel mill products jumped in 2018. This translated into somewhat higher input costs for goods like autos, machinery, and construction materials. The consumer price index (CPI) saw only a minor blip attributable to tariffs – estimates are in the range of a few basis points on headline inflation. For instance, one analysis by Barclays in 2018 suggested that if fully passed through, the steel/aluminum tariffs might add ~0.1 percentage point to inflation. In reality, other factors (oil prices, labor costs, etc.) dominated, and the tariff effect was hard to discern in top-line inflation data.

That said, specific consumer goods had noticeable price hikes. A striking example: laundry equipment prices rose about 17% in 2018 (the largest increase on record), which researchers like economists at the University of Chicago and Federal Reserve attributed to the combined effect of tariffs on washing machines (20% safeguard tariff) and the higher steel costs for making them. They estimated consumers paid an extra $1.5 billion for laundry appliances – far more than the tariff revenue collected – illustrating the consumer cost of such measures. Similarly, the price of canned goods (soup, beer) saw slight increases from aluminum tariffs. While these increments might be small per item, over hundreds of millions of purchases they add up.

Trade balance: A central justification for the tariffs was to reduce import dependence and improve the trade balance in metals. In that narrow sense, they succeeded: U.S. imports of steel dropped dramatically after 2018. From 36 million metric tons in 2017, steel imports fell to about 25 million tons by 2019 (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute). They have since hovered around that level (2023 imports were also ~25 million tons) (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute), well below pre-tariff highs. Aluminum imports similarly declined from 6.2 MMT (2017) to 5.3 MMT (2019) (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute) and about 4.8 MMT in 2023 (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute). In dollar terms, the U.S. was importing billions less of these metals. Domestic production initially rose to fill part of the gap: U.S. steel output increased from 81.6 million tons in 2017 to 87.8 million in 2019 (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute), helping reduce the trade deficit in steel. By 2022–2023, output fell back to ~80 million tons (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute). Apparent steel consumption in the U.S. actually declined (the U.S. used 7% less steel in 2023 than it did annually in 2012–2017 on average (Trade Fact of the Week: American steel output lower in 2023 than in 2017; aluminum about the same as 2017. - Progressive Policy Institute), indicating perhaps greater efficiency or suppressed demand. So, in metal trade, the U.S. became more self-sufficient by necessity, with import penetration for steel dropping to around 20% from ~30% before.

However, when looking at the broader trade balance, there was no improvement – in fact, the overall U.S. trade deficit in goods hit record highs in 2018 and again in 2019. Why? Because imports of other goods rose (Americans, flush with tax-cut money, bought more of everything, including imports), and exports faced retaliation and a strong dollar. The steel and aluminum tariffs were too small relative to total trade to move the needle significantly on the aggregate trade deficit, which is driven by macro factors like fiscal policy and exchange rates. In 2018, the U.S. goods trade deficit expanded, with a particularly large increase in the deficit with China (owing largely to the tariffs and counter-tariffs disrupting normal flows). Essentially, reduced metal imports were offset by more imports of other items or higher prices on those imports.

Trade partners and relations: On a qualitative level, the tariffs strained relations with allies (EU, Canada, etc.) until agreements were reached. This had diplomatic and economic side-effects beyond the immediate numbers. Business uncertainty rose as companies worried about further escalation (e.g. at one point Trump threatened tariffs on auto imports, which would have been far larger in impact). The eventual quota deals with the EU, UK, Japan and the lifting of tariffs on Canada/Mexico restored some stability by 2020–2022, but not before global supply chains had been rattled.

Retaliatory impact on trade: The retaliatory tariffs, as discussed, hurt U.S. exports significantly. For instance, U.S. agricultural exports were estimated to be $13.2 billion lower per year on average from 2018–2019 due to retaliation (Retaliatory Tariffs Reduced U.S. States' Exports of Agricultural ...). U.S. exports of items targeted by partners (like the bourbon, bikes, jeans targeted by the EU) stagnated or fell. Thus, while the U.S. imported less steel, it also exported less of other goods. This is why economists often note that trade wars can be lose-lose: the U.S. didn’t really shrink its overall trade deficit; it just changed its composition (fewer metal imports, fewer farm exports, etc.). The trade balance in steel and aluminum improved, but the overall trade balance did not improve and arguably worsened.

In summary, at the macro level, the steel and aluminum tariffs shaved a tiny amount off GDP, added a bit to inflation, and reconfigured trade flows without fixing the overall trade deficit. Domestic metal production rose initially but then settled back, and the U.S. became a bit less import-dependent for those metals. The big picture outcome was not an economic catastrophe by any means (the economy continued growing and adding jobs in 2018-2019), but also not a net win economically – essentially a redistribution of resources with efficiency costs. The consensus of most studies is that the tariffs made the economy slightly less efficient (a net cost in GDP and jobs), even if they achieved certain security or political objectives.