Since President Donald Trump’s proclamations to impose tariffs on certain imports of steel and aluminum products, some people are questioning upon which side — winning or losing — they’ll wind up. The answer depends on whether you’re supplying the raw materials or buying them.
U.S. ALUMINUM AND STEEL MAKERS
After Trump’s announcement, aluminum and steel stocks jumped, meaning fatter profits for the major steel and aluminum producers — making them the main victors in the arena.
FOREIGN TOOL AND MACHINE-PART MAKERS
Increased prices in aluminum and steel means increased prices in the products made from them. This makes foreign products more favorable over American ones, especially to bigger companies that could just build their products abroad and then import them to keep costs low.
RUST BELT STATES
States that occupy the region known as the manufacturing heartland could benefit from the tariffs. Steelmaking states like Pennsylvania, Indiana and Michigan, could have more job opportunities for blue-collar workers.
U.S. FACTORY WORKERS
Natalie Kitroeff and Ana Swanson from the New York Times report that those who are producing the raw material employ around 200,000 people, while the companies that buy the steel and aluminum to make products employ more than 6.5 million people (Heritage Foundation analysis of Commerce Department data). The increased costs of steel and aluminum materials could cause smaller businesses to raise their prices or cut jobs to make up the difference.
U.S. ALUMINUM USERS
Manufacturers of aluminum cans, airplanes and cars could face severe consequences from the tariffs. The higher costs could potentially be passed on to their customers. Darwei Kung, the head commodities manager at Deutsche Asset Management, stated that they could also lose market share as overseas suppliers bring their products into the U.S. at cheaper costs.
The biggest loser of all. Once prices of raw materials start to increase, the manufacturers using those materials on their own products must raise their prices. Bargain prices will become a lot more challenging to find.