Steel Tariffs: The Art of Shooting Yourself in the Foot (Again)

Did the masterplan use the same dirty game he did for create his borderline status?

Feb 10, 2025

If history has taught us anything, it's that protectionism is the economic equivalent of bringing a gun to a poker game—intimidating in the short term, but usually a terrible long-term strategy. Yet, here we go again: the U.S. is slapping a 25% tariff on imported steel and aluminum, hoping to revive domestic production. A bold move? Or just another rhetorical stunt with predictable consequences?

Reality Check: The Numbers Don't Lie

The U.S. consumes 100–110 million metric tons of steel annually but only produces 80–90 million. That’s a 25–30% import dependency, with key suppliers like Canada (20%) and Mexico (15%). As for aluminum, things get worse: the U.S. produces a meager 1–1.2 million metric tons while consuming 9–10 million, making it 80–90% dependent on imports—with Canada again as the biggest supplier (50–60%).

So, what’s the brilliant plan here? Jack up prices by 25%, hoping that somehow, magically, U.S. production will ramp up overnight to cover a 30% steel gap and an absurd 500% aluminum shortfall?

Higher Prices, Less Investment, More Inflation—Great Job!

Let’s talk consequences:
✅ Steel prices jump from $700–$800 per ton to $875–$1,000.
✅ Aluminum prices surge from $2,000–$2,500 to $2,500–$3,125.
✅ Inflation? Yep, tariffs add 0.1–0.2 percentage points to the CPI.

And who eats these costs? Manufacturers, automakers, aerospace, construction, and consumers. Everything from your Ford F-150 to your beer can just got pricier.

Wait, Wasn't There a Smarter Option?

Instead of taxing imports (which hurts everyone except a handful of inefficient domestic producers), why not:
🔹 Invest in modernizing U.S. steel mills?
🔹 Offer tax incentives for new production facilities?
🔹 Develop a 5–10 year roadmap for real self-sufficiency?

But no, a long-term industrial policy lacks the drama of tariff wars. And let’s be honest—this looks more like an election stunt than real economic strategy.

When Will We Learn?

Other countries will retaliate (they always do). Supply chains will adapt, likely shifting imports through intermediaries (Canada, anyone?). Meanwhile, the U.S. still won’t have enough domestic production to replace what’s lost.

So, was this about boosting American industry or just raising the stakes in a geopolitical bluff? Your move, Washington.

DANIELE PRANDELLI

A 30-year journey fostering innovation in China's steel, automation, and mechanical engineering sectors.

Full analysis under

DATA AND SOURCES:

Here is the available data on U.S. steel production, imports, consumption, import sources, and market prices for steel and aluminum during 2020–2024:

Steel:

Production:
- In 2024, U.S. raw steel production was approximately 1,656,000 net tons in the week ending February 1, with a capability utilization rate of 74.4%.
  steel.org
Imports:
- In 2019, the U.S. imported 26.3 million metric tons of steel, a 15% decrease from 30.8 million metric tons in 2018.
  legacy.trade.gov
- In 2024, the main sources of steel imports to the United States were:
  - Canada: 6.56 million tons
  - Brazil: 4.49 million tons
  - Mexico: 3.52 million tons
    gmk.center
Consumption:
- In 2023, the apparent consumption of finished steel products in the U.S. was estimated to have decreased slightly due to factors such as interest rate increases.
  pubs.usgs.gov

Aluminum:

Production:
- Primary aluminum production in the U.S. was about 750,000 metric tons in 2023, a decrease from 861,000 metric tons in 2022.
  pubs.usgs.gov
Imports:
- In 2024, the U.S. imposed a 25% tariff on aluminum and derivative aluminum articles imported from Mexico if the country of primary smelt, secondary smelt, or most recent cast of the aluminum is China, Russia, Belarus, or Iran.
  strtrade.com
Consumption:
- In 2023, transportation applications accounted for 35% of domestic aluminum consumption; the remainder was used in packaging (22%), building (14%), electrical (9%), consumer durables and machinery (8% each), and other sectors (4%).
  pubs.usgs.gov

Market Prices:

Steel:
- In 2024, U.S. steelmakers increased prices following the imposition of tariffs.
  finance.yahoo.com
Aluminum:
- In 2023, the estimated average annual U.S. market price for aluminum decreased by 15% from that in 2022.
  pubs.usgs.gov