Steel and aluminum tariffs expected raise cost on cars, homes and more

The Trump administration raised tariffs on aluminum and steel to 50% today, a move experts say could increase costs on everything from homes and cars to household and office supplies.

While the U.S. has carved out its own niche in domestic metals manufacturing, it also relies on imports from abroad to fill in the gaps: America imported 26.2 million metric tons of steel and 5.4 million metric tons of aluminum from abroad last year, according to the International Trade Administration. Canada serves as the biggest foreign source for both metals.

The White House has been aggressively trying to pare back on America's reliance on foreign nations, imposing 25% tariffs on steel and aluminum in February, citing national security concerns. President Trump, during a visit to a U.S. Steel mill in Pittsburgh on May 30, announced he was doubling down on that rate, raising the 25% levies to 50%. The higher tariffs went into effect Wednesday at 12:01 a.m. EST.

While the new tariffs have won over some of the nation's largest steel makers, who saw huge gains in share prices following Mr. Trump's May 30 announcement, experts say the levies will raise cost of manufacturing on a wide range of products, making many items more expensive to buy. That's because businesses typically pass on most or all of tariff-related costs to consumers through higher prices, according to economists.

"That will hurt the people working in those industries and put their jobs under stress," said Wayne Winegarden, a senior fellow and director at the Pacific Research Institute, a right-leaning think tank. "And it also is going to put pressure on consumers, because those prices are going to increase."

While some businesses may ultimately choose to absorb some of those increased costs, experts say others are likely to pass some of them along to customers — as was the case in 2018 when tariffs on steel and aluminum tariffs were introduced by the first Trump administration .

Here are some of the consumer products that may get pricier with the new 50% steel and aluminum tariffs now in effect.

Automobile manufacturers are likely to feel the burn of higher tariffs, as they rely heavily on steel and aluminum for car production. The materials are found throughout the body and structure of a car, in everything from the car's frame to engine parts to the hub caps, pipes and bumpers. According to Jay Cushing, senior bond analyst with Gimme Credit, steel accounts for 60% of the weight of the average vehicle.

Dean Baker, senior economist at The Center For Economic and Policy Research, told CBS MoneyWatch there is about $800 worth of steel in each vehicle. With that figure in mind, he projected a 50% tariff would drive up the cost of a car by around $400.

Cushing, however, projects an even steeper price hike. "A doubling of tariffs from 25% to 50% could raise the cost of a car from $1,500 to $3,000 per vehicle," he told CBS MoneyWatch in an email.

A 25% tariff on imported cars remains in place, although the Trump administration has softened industry tariffs to ensure automakers aren't hit twice with the additional import duty on imported steel and aluminum. "The metal tariffs should apply only once per vehicle," Cushing said.

Athletes may also notice a slight uptick in prices when shopping for new equipment such as baseball bats, tennis rackets and lacrosse sticks which sometimes contain aluminum. Industry experts say they're already seeing price increases on aluminum bats, which are fairly expensive to begin with: upwards of $100 in many cases, with higher-end models running as high as $400.

Those higher price tags could end up creating negative repercussions for sports participation. The Sports & Fitness Industry Association, which tracks industry data, has consistently found that the lowest household income brackets are most negatively impacted in terms of sports participation.

"If we're going to continue to increase costs on equipment, then those lower income level households are going to continue to be left on the sideline in terms of literally and figuratively," said Todd Smith, president and CEO of the Sports & Fitness Industry Association.

Whether it be beer, soda or seltzer, any beverages that come in a can will likely cost Americans more after the steel and aluminum tariffs take effect.

This could lead major name-brand businesses to shift their strategy. Back in February, the CEO of Coca-Cola James Quincey said if aluminum cans become more expensive, the company would put more emphasis on plastic bottles. The soda giant sources aluminum for its cans from Canada, Quincey said on a February company earnings call.

Another place where Americans might feel a slight pinch is at the grocery store. Nonperishables that come in aluminum or steel cans — think beans, chickpeas, and soups — are typically thought of as a way for shoppers to economize. But the steel and aluminum tariffs could ratchet up the price of canned goods.

Robert Budway, president of the Can Manufacturers Institute, told the Associated Press that manufacturers have become increasingly reliant on imported materials in recent years and that it's American families who will most likely bear the increased tariff costs.

Baker, the economist from The Center For Economic and Policy Research, didn't have an exact estimate but said the increase to the cost of canned goods would be fairly low. "If you get $2 can of soup, maybe it would go up a cent or two," he said.

There could be indirect price increases at the grocery store as well. Many packaged goods are made using machines with steel and aluminum machines, Baker said, meaning products like cookies could get more expensive.

A wide range of appliances from dishwashers and dryers to garbage disposals and air conditioners all stand to become pricier as a result of the Trump administration's 50% steel and aluminum tariffs.

The Association of Home Appliance Manufacturers did not respond to CBS MoneyWatch's request for comment, but has said in the past that they strongly support an "integrated North American market" and have called for "common-sense" trade policies.

"It can go from the grandiose of a washing machine and a car, to the trivial, like a staple or a paper clip," said Winegarden at the Pacific Research Institute.

Lawn mowers could also see price hikes. Baker estimates that a lawn mower that goes for $250mightcost $255 after the tariffs take effect .

"Will people notice that? Some will, some won't," he said. "But there's no doubt the direction is higher — the question is how much."

Building materials could also be impacted, which will ultimately translate to higher home prices.

In an April blog post, Realtor.com documented how the price of nails used in homebuilding has already started to increased due to tariffs. A single box of coil roofing nails could go from $65 to $325, the real estate platform predicted at the time.

Other products used in home construction like steel fasteners could also get caught in the crosshairs of the tariffs. This bodes poorly for the housing sector — which is already facing pressure from high prices, steep mortgage rates and lack of inventory.

"President Trump's move to double steel and aluminum tariffs will have a negative impact on housing affordability by further disrupting building material supply chains and fueling business uncertainty," said Buddy Hughes, chairman of the National Association of Home Builders.

Before the new 50% tariffs were introduced, the trade association estimated that tariff activity would add roughly $10,900 to the average cost of a new home.

• Tariffs
• Trump Administration
• Canada