The White House has now denied the FT report, according to an article published by S&P Global. What is undeniable, however, is that it is not exporters who are footing the tariff bill. It is the American consumer.
Here’s a look at why these two products are so important for any economy, and how Trump’s tariffs have worsened the affordability crisis in the US.
Steel and aluminium
As mentioned above, steel and aluminium are foundational goods for an economy. The US is one of the world’s biggest importers of these materials. It imported 28.8 million tons of total steel and 5.43 million tons of aluminium in FY 2024-25, according to data from the American Iron and Steel Institute (AISI) and the ITA Aluminium Import Monitor. (Trump announced his tariffs only towards the end of this financial year).
America’s top suppliers at this time were Canada, Mexico, Brazil and China.
During his first term, Trump imposed a 25% tariff on steel and 10% tariff on aluminium in 2018.
In February 2025, around the beginning of his second term, Trump increased the duties on both goods to 25%. In June that year, he hiked the tariffs on both to 50%, citing the need to boost domestic production and reduce reliance on foreign imports.
The US administration’s stated goal for these escalating measures was to achieve an 80% “capacity utilisation” rate for US steel mills. The capacity utilisation rate essentially measures how much a factory produces against how much it can actually produce.
But data as of February 7 from the AISI shows capacity utilisation by US factories has stalled between 76.2% and 77.1%. High tariffs made raw steel so expensive that US factories — from automobiles to appliances and containers — cut down the volume of their orders. The AISI market report in February also indicated a shortfall of 7.61 million tonnes in the monthly Apparent Steel Supply, or the amount of available steel in the US market.
Who pays the bill?
Let’s put it this way. Imposing a tariff on steel and aluminium is like imposing a tax on every Ford truck built in Michigan, every soda can sold at a 7/11, and every infrastructure project between Maine on the east coast and California on the west.
Trump may frame the 50% duty as a penalty on the exporter. What really happened was that foreign exporters transferred nearly the entire tariff burden to American importers, who raised the price of steel, forcing the average consumer to cover the difference.
This is what is called a “pass-through” effect — when a business, instead of absorbing the cost of a new tax, simply transfers it forward onto its customers.
A recent study by the Federal Reserve Bank of New York shows that approximately 94% to 96% of the cost of all tariffs was paid by American importers and, eventually, consumers.
Another recent report, this one by Kiel Institute for the World Economy in January, found that American importers and the final consumer bore 96% of the tariff burden, while the rest was by foreign exporters.
China is the most visible example of this skewed dynamic, Chinese finished steel exports to the US rose by around 4.88% as exporters rushed shipments to beat incoming trade barriers.
When the Trump administration expanded its trade war from the targeted Section 232 metal tariffs to broader, sweeping duties under the IEEPA (International Emergency Economic Powers Act), the American buyer was unlikely to feel a beneficial difference since Section 232 was designed to protect specific strategic pillars (such as steel) while the IEEPA measures were deployed as a universal tax on almost all imported goods. Hence, regardless of the legal label utilised by the Trump administration, the “pass-through” effect remained strong.
The effect on industry
Because steel and aluminium are foundational inputs, the 50% tariff skyrocketed costs for downstream industries, such as automakers and appliance manufacturers.
According to an analysis by the Tax Foundation and the Peterson Institute, the tariffs functioned as a massive tax on “customer” industries.
Economists at the Peterson Institute also estimated that the cost to the broader US economy was nearly $650,000 for every single steel job created or “saved”.
Trade war
Escalating trade measures have worsened the situation. When the tariffs were originally deployed in 2018, America’s biggest suppliers launched immediate countermeasures. The EU adopted a phased retaliatory framework focused on cultural and political disruption, targeting US agricultural exports and goods produced in key Republican states, such as Kentucky Bourbon and Harley-Davidson motorcycles.
Rather than de-escalating, the US administration doubled down in August 2025 by expanding the tariffs to “derivatives” — finished goods such as washing machines, motorcycle parts and even pie tins.
This was done because identifying the exact percentage of foreign steel in a finished product, say a washing machine, had become an administrative nightmare for US Customs. This expansion triggered a new wave of precise, dollar-for-dollar strikes from Canada against US row crops (such as corn and cotton), affecting the American agricultural export market.
Will there be any effect on India?
The recent US-India Interim Trade Agreement, signed in February 2026, reflects Trump’s continued protectionism towards steel and aluminium.
Under the new agreement, the US has removed the 25% penal duty on India for buying Russian oil and reduced the baseline reciprocal tariff on Indian goods to 18%.
However, this diplomatic victory was strictly confined to IEEPA tariffs.
The agreement explicitly excluded Section 232 measures. This means that while the broader Indian economy gained easier market access, India’s massive metals sector — which exported roughly 4.8 million metric tons of steel between April and December 2025 — was bypassed. Indian steel and aluminium remain trapped behind Trump’s 50% tariff wall.
Large spools of steel at a factory in Taiwan. Taiwan has long been the top provider of screws to the US, but tariffs have hurt its factories. New York Times 
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