On Tuesday, the White House announced it will increase tariffs on steel and aluminum imports from 25% to 50%, with the hike taking effect on Wednesday.
“I have determined that it is necessary to increase the previously described steel and aluminum tariffs to adjust the imports of steel and aluminum articles and their derivative articles so that such imports will not threaten to impair the national security,” reads the proclamation. “In my judgment, the increased tariffs will more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the United States market and thereby undercut the competitiveness of the United States steel and aluminum industries.”
The proclamation does carve out a caveat for the United Kingdom. It implements the May 8 U.S.-UK Economic Prosperity Deal, which allows for differential treatment of steel and aluminum imports from the United Kingdom.
“On or after July 9, 2025, the Secretary may adjust the applicable rates of duty and construct import quotas for steel and aluminum consistent with the terms of the EPD, or he may increase the applicable rates of duty to 50 percent if he determines that the United Kingdom has not complied with relevant aspects of the EPD.”
Adjusting Imports of Aluminum and Steel into the United States
During his first term in 2018, President Donald Trump implemented a 25% tariff on steel imports and a 10% tariff on aluminum imports. The tariffs triggered cost increases, forcing industry leaders to turn to other countries as their suppliers. When tariffs were implemented on steel imports from Mexico and Canada on June 1, 2018, companies like Mount Airy–based InSteel Industries Inc. were forced to shift suppliers, turning to countries like Algeria after tariffs made Canadian steel less economically viable.
“In our sector of the steel industry, there is inadequate domestic hot rolled capacity to supply domestic demand,” Howard Woltz III, president and CEO of InSteel Industries, told the Carolina Journal. “We are, therefore, forced to purchase offshore steel. Last Friday, the announcement that the section 232 tariff would double to 50%, with no exemption for in-transit material, added approximately $150 per ton to our cost, which is substantially more than the profit margin generally earned by the industry. Like most US purchasers of hot rolled steel, we have stiff competition from offshore sources.”
Experts have asserted that, as we saw in 2018, this move will likely negatively impact industries and cause job losses.
“Trump’s latest tariff increase is highly misguided. Many more people work in companies that rely on steel and aluminum as an input than actually make steel or aluminum,” Brian Balfour, VP of Research for the John Locke Foundation, told the Carolina Journal. “Studies of Trump’s 2018 tariffs on steel and aluminum found that the modest boost to domestic steel and aluminum production were more than offset by job losses in industries relying on those items as inputs.”
The rise in steel and aluminum imports has the potential to significantly affect key North Carolina industries, particularly steel and automotive manufacturing. The automotive sector alone employs more than 37,000 workers across the state. If manufacturers are compelled to offset tariff-related costs through wage reductions or workforce downsizing, thousands of North Carolina families could face severe economic hardship.
“The increased costs of these inputs forced those companies to cut back on payroll, and researchers estimated the tariff impact to be a net loss of 75,000 U.S. jobs,” concluded Balfour. “Notably, the CEO of aluminum giant Alcoa has warned this latest round of tariffs could cost up to 100,000 US jobs. This will harm North Carolina industries that rely on steel and aluminum, such as automotive, construction, and aerospace.”
The rise in tariffs makes it increasingly challenging for US manufacturers to compete with global giants of the steel industry, such as China, the world’s top steel supplier, which has investments worldwide.
“US steel prices are the highest in the world now, and I am not sure how downstream industries are expected to compete,” concluded Woltz. “I am concerned that the market will experience serious demand destruction due to the uncertainty created by trade policy, and with the US having the highest prices in the world. By some counts, employment by purchasers of hot rolled steel is as much as 80x the employment level is steel mills that are protected by the tariff. It is hard to make sense of this.”
With China’s chokehold on the steel industry and the rise in import tariffs, the future of steel-based industries in North Carolina remains uncertain.
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