A worker at Riverdale Mills, a Massachusetts-based manufacturer of wire fencing and welded mesh used in lobster and crab traps. – Jessica Rinaldi/The Boston Globe/Getty Images
Steel prices started rising for some U.S. companies even before President Trump announced tariffs on Canada and Mexico. Executives said they are bracing for more to come.
Trump on Saturday announced 25% tariffs on all imports from Mexico and Canada starting Tuesday. On Monday, he said he would hold off for a month as talks got under way between the U.S. and its neighbors.
If implemented, the duties are expected to strengthen U.S. steelmakers’ pricing power by effectively raising prices for foreign steel. It could also enable domestic companies to raise their prices, too.
At Riverdale Mills, a Massachusetts-based manufacturer of wire fencing and welded mesh used in lobster and crab traps, Chief Executive James Knott said his domestic suppliers of steel wire rod notified him two weeks ago that they are raising prices.
Knott said he has been buying about 80% of Riverdale’s wire rod from Canada because shipping costs are lower to the East Coast than buying from mills in South Carolina, Texas and Illinois. Steel represents two-thirds of Riverdale’s production costs, and he said higher prices would put his company at a disadvantage versus foreign competitors.
“We like to use U.S. steel, but if you can’t buy the steel at the right price, you can’t compete,” Knott said. “The U.S. has the highest-priced steel.”
Canada and Mexico are two of the largest suppliers of imported steel to the U.S., accounting for 35% of all imported steel in 2024, according to the American Iron and Steel Institute and the Census Bureau. The two countries were included in steel and aluminum tariffs imposed during Trump’s first term in 2018, but they were later exempted in exchange for negotiating a new free-trade agreement with the U.S.
Canada and Mexico accounted for 35% of all imported steel in 2024. – Hector Lorenzo/Reuters
Executives from U.S. steel companies were enthusiastic backers of the tariffs and have urged Trump to deploy them again in his second term. They have called for eliminating tariff exemptions and duty-free import quotas, saying those carve-outs allow unfairly low-price steel to enter the U.S. and undermine the steel market.
Trump’s Saturday announcement of the duties included a 10% tariff on imports from China. The Trump administration has said the tariffs would help prod Mexico, Canada and China to crack down on illegal immigration and illicit fentanyl shipments into the U.S. Canada and Mexico have vowed to retaliate with their own tariffs, setting the stage for a North American trade war.
For consumers already reeling from rising retail prices and inflation, pricier steel and aluminum could further lift costs for durable goods like appliances and automobiles, as well as consumer products with aluminum packaging, such as canned beverages.
“We’re all going to get a price increase,” said Ralph Hardt, owner of Belleville International, a Pennsylvania-based manufacturer of valves and components used in the energy and defense industries. Steel and aluminum are Belleville’s largest expenses.
U.S. Steel announced a $50-a-ton price increase for flat-rolled steel this week, and Nucor has raised its price by $25 a ton over the past two weeks, according to steel customers.
Trump administration tariffs on aluminum from Canada and Mexico would get absorbed in the U.S. through a delivery surcharge attached to all aluminum transactions. The higher charge could be a windfall for U.S. aluminum companies that don’t have to pay the tariff but get to collect a higher delivery premium from customers as if they did.
Beverage companies strongly opposed the Trump administration’s 10% tariff on imported aluminum in 2018. The industry complained that beer and soda makers paid delivery premiums above what was warranted to cover the tariff.
Canada is the U.S.’s largest supplier of aluminum made in smelters, sending 2.8 million metric tons to the U.S. in 2023, according to industry data.
The tariffs announced Saturday also include a 10% tariff on imports from China. – str/Agence France-Presse/Getty Images
Canada is home to about 40% of aluminum maker Alcoa’s production capacity. The company said it would likely divert shipments from Canada to other countries to avoid paying a U.S. tariff.
The U.S. steel industry is coming off its weakest year since 2020, when the Covid-19 pandemic temporarily idled production. Spot market prices for coiled sheet steel have been mostly stuck below $700 for months.
Several attempts by steel companies to raise prices failed last year because of weak demand from buyers, including the automotive, construction, appliance and machinery industries.
“Manufacturing right now isn’t very robust, but the supply is certainly there because of all the mill capacity that has been built,” said Jim Barnett, CEO of Grand Steel Products, a Michigan-based steel distributor.
Over the past four years, nearly 12 million tons of additional annual capacity to make flat-rolled steel has been completed or is under construction in the U.S., according to commodity-markets research firm Argus Media. Steel executives trace the buildout’s origins to the first Trump administration’s tariffs, which boosted steelmakers’ profits and provided confidence to invest in more U.S. production.
Now they are counting on additional tariffs to squeeze more imports out of the U.S. steel market.
“You’re going to see those bad actors that are distorting how they price goods penalized,” said Leon Topalian, CEO of U.S. steel industry leader Nucor, on a late January conference call.
