Steel tariffs could drive up domestic prices and capacity, but unlikely to create jobs

Manufacturers are bracing for the impact of President Donald Trump’s newly announced 25% tariffs on all steel and aluminum imports. 

The tariffs, which do not include any exemptions or product exclusions, could drive up operational and supply costs for manufacturers that rely on steel inputs, according to Greg Husisian, chair of the international trade and national security practice at Foley & Lardner. 

Much remains to be seen, however, when it comes to how the new trade order will interact with existing steel tariffs that Trump enacted during his first term, or how far the tariffs will extend into downstream steel products, Husisian said. 

Many manufacturers rely on foreign steel suppliers – finished steel imports made up approximately 23% of the commodity’s consumption last year, according to the American Iron & Steel Institute. Higher tariffs could push more manufacturers to turn to the domestic steel market, which could drive up prices and push steelmakers to increase domestic production capacity, Husisian said. 

Metal recycler Greenwave Technology Solutions, which supplies steel mills with recycled materials including steel and aluminum, is already seeing prices for scrap metal rise, with prices up 10% so far this month, according to CFO Isaac Dietrich. Nucor, one of Greenwave’s largest customers, has increased its orders as it moves to a primarily domestic supply chain, Dietrich added.

While demand for U.S. steel is likely to rise as a result of the tariffs, Husisian said it’s unlikely that will translate to significant job growth.

“The one thing I know it won’t have a big impact on is U.S. steel manufacturing jobs,” Husisian added. “The idea that we’re ever going to be anywhere near the 300,000 manufacturing steel jobs that we had at one point is just never going to happen.”

There were roughly 83,600 workers employed in iron and steel mill and ferroalloy production in the U.S. in 2023, according to the Federal Reserve Bank of St. Louis. Employment in the industry has fallen steadily over the last few decades, down from nearly 200,000 workers in 1988.

Job growth could come in smaller batches, however — Dietrich said Greenwave is likely to add roughly 50 workers this year due to heightened demand. 

The tariff move could help to bring more financial stability to the U.S. steel industry, which has seen some volatility over the past year amid Japan-based Nippon Steel’s bid to acquire U.S. Steel. On Friday, Trump commented that the deal would now take the form of Nippon’s investment in U.S. Steel, though the company has yet to publicly confirm that information. 

Industry groups applauded the tariff news, with Steel Manufacturers’ Association Pres…