President Trump issued separate presidential proclamations to increase tariffs to 25 percent on all US steel imports and raise tariffs from 10 to 25 percent on all aluminum imports effective February 11, 2025. The White House metal tariff fact sheet is here. Many Mises Wire writers in recent months have clearly written that the Trump tariffs are tantamount to a tax on every day American consumers.
Aluminum and steel are required for our modern society to function. One unintended consequence of the Trump authorized tariff increase is market prices paid for recycled (scrap) aluminum and steel are rising. This is caused by the increase in demand for domestically-sourced aluminum and steel. Prices for these two imported metals increased by 25 percent.
Another unforeseen consequence is the price for many grades of steel used in crude oil and natural gas production equipment and the pipeline industry will increase leading to higher fuel prices downstream.
Each US metal recycler pays varying prices for received varieties of aluminum scrap like cans, extruded, sheet, and plate and varieties of steel, cast iron, stainless, etc. These rising scrap aluminum and steel prices are good news to many people who sell these used metals to metal recycling businesses across the US. Most US scrap steel is sourced from industrial customers.
Finding publicly-available, online, current scrap metal market prices paid by individual metal recycling businesses or publicly-traded scrap metal buyers is near impossible. Any price paid is determined by regional demand and supply for each type of metal bought and sold on that day. I work with people who sell scrap aluminum and steel to one Texas privately-owned metal recycler. Their aluminum can and steel scrap prices have increased since the February 11, 2025, presidential proclamation.
A USA Today article released on February 11, 2025 stated, “In 2024, 23% of all steel used in the US was imported, with Canada, Brazil, Mexico, South Korea and Vietnam as the biggest suppliers.” This information is from the American Iron and Steel Institute January 25, 2025 press release.
The article further states, “Roughly half of all aluminum used in the US is imported, with most of it coming from Canada. At 3.2 million tons last year, Canadian imports were twice the next nine countries combined, according to Reuters.”
Rolled aluminum is used for beverage can production. Aluminum ingots are melted down to produce many aluminum products like commercial and home window frames, many automotive parts, rainfall gutter products, etc. Your aluminum beverage may cost more to produce resulting from the Trump metal tariffs.
Rolled tubular steel products are used in making crude oil and natural gas exploration and drilling equipment and new pipelines to transport crude oil and natural gas to be processed at a downstream US oil refinery and natural gas processing plant. According to Wood Mackenzie, an energy data analytic firm, “US drillers imported some 40% of the so-called oil country tubular goods they needed last year.”
“About 14% of what we buy, it comes from countries that will be impacted by tariffs,” Andy Hendricks, the chief executive of Patterson-UTI, which is among the biggest providers of drilling equipment, told Reuters.”
“. . . the European Union, which threatened counter-tariffs, saying that ‘Tariffs are taxes. They are bad for business, and even worse for consumers,’ per European Commission President Ursula von der Leyen.” This is a Trump tariff truth from the EU President.
Many US oil refinery equipment pieces repaired or replaced contain steel, some of which must be imported. Many parts of the oil and gas industry are accepting the reality that steel used in their operating equipment will cost more to buy and it will eat into their existing profit margin. Expect your diesel, gasoline and jet fuel price at the pump to rise partly from Trump’s steel tariffs.
The simple solution to solve the recent increase in aluminum and steel scrap prices is President Trump rescinding the proclamation authorizing the tariff increases on imported aluminum and steel which would bring reality and not chaos to part of the US scrap metal market. This federal government market intervention of increasing imported metal tariffs is a reminder that history repeats itself with unintended consequences. When will federal government policymakers choose to learn from their past policy lunacy?
