Steel and aluminum tariffs could cause broad price hikes across industries, experts say
Sweeping 25% tariffs on all U.S. steel and aluminum imports could cause prices on a range of consumers foods, including cars and washing machines, to rise. Components used in manufacturing and for construction such as nails, could also become more expensive.
Anything that's made with metal, from homes and cars to canned foods and beverages could soon get a new and higher price tag.
"All manufacturing that uses steel or aluminum, or uses something that uses steel and aluminum will be affected," international trade expert Christine McDaniel, senior research fellow at the Mercatus Center at George Mason University, told CBS MoneyWatch.
Dr. Wayne Winegarden, a senior fellow and director at the Pacific Research Institute, a right-leaning think tank, called the forthcoming tariff impact "a barn burner," leading to higher prices and an economic slowdown.
He added that all "broad-based core commodities" are vulnerable to price hikes as a result of the levies. In addition to automobiles and electronics, which rely heavily on metals, that includes less obvious goods like canned goods, whose prices could rise if packaging costs jump.
"We are going to see it in places you don't expect it," Winegarden said.
American consumers likely to see higher prices on cars and more
Car, truck, bus and tractor parts were the largest import category by volume last year, that will be covered under the tariffs, according to the United States International Trade Commission.
American Automotive Policy Council, which represents Ford, General Motors and Stellantis, said the new tariffs "will add significant costs for automakers, suppliers and consumers" in a statement to CBS News.
Inevitably, some of those added costs will be passed along to consumers.
"It is not easy for American companies that use steel and aluminum in production to find it elsewhere, so we'll see increases in prices. Makers of vehicles will face higher costs, which will be passed on to consumers," Layna Mosley, politics and international affairs professor at Princeton School of Public and International Affairs, told CBS MoneyWatch.
Metal parts on doors, window frames and other hardware used in the construction of housing will also be subject to the levies, leading to growing costs for homebuilders.
Jim Tobin, CEO of the National Association of Home Builders, pointed to estimates showing that the metal tariffs could add up to $10,000 to the cost of a home, although he noted it is likely to take months for the impact to become clear. "Those costs are going to be passed on to the ultimate homeowner or renter," he told CBS News.
Machine parts, including steel wires, screws and more are also likely to be hit, raising the price of a broad range of appliances from dishwashers and dryers to garbage disposals and air conditioners.
"Just look around the house. Anything that has steel or aluminum in it will be exposed to tariffs," McDaniel said.
Gym and sports equipment will also be tariffed, though manufacturers may have stockpiled some materials in anticipation of the tariffs going into effect, enabling them to head off price hikes for a short period, Mosley noted.
Higher price for aluminum cans
In addition to automakers, construction projects and possibly defense contractors, the tariffs would also increase costs to "food processing and packaging including can manufacturers," Satyam Panday, chief economist, U.S. and Canada, S&P Global Ratings, said in a recent report.
Coca-Cola CEO James Quincey said in an earnings call last month said that the company imports aluminum for its cans, and that if tariffs make them more expensive, it could start selling more beverages in plastic bottles.
"As it relates to our strategies around ensuring affordability and ensuring consumer demand, if one package suffers some increase in input costs, we continue to have other packaging offerings that will allow us to compete in the affordability space," Quincey said. "For example, if aluminum cans become more expensive, we can put more emphasis on PET [plastic] bottles, et cetera."
"Tariffs and non-tariff barriers tend to disproportionately burden the small and midsize businesses," added Panday. "Profits are likely to be squeezed at the margin. To the extent businesses can pass on the rising cost, consumers would also eventually see their prices increase. Overall, pressure on inflation would rise just as markets and consumers are appearing to be sensitive to inflationary expectations."
For Brooklyn-based brewery Talea, the tariffs on aluminum, which the company uses for its beer cans, could lead to higher operating costs, co-founder LeAnn Darland recently told CBS News' Kelly O'Grady. Darland said she hopes to share any increased costs with suppliers, because she's not sure consumers will be willing to swallow any price hikes.
Even without the tariffs, said Darland, "Sometimes we get complaints that our beer is too expensive."
—CBS News' Natalie Brand contributed to this report.
