An Additional Tariff of 5% imposed on Steel and Aluminium components likely to increase consumer prices.

The Trump administration have expanded tariffs on steel and aluminum imports on Monday. The move adds a 5% tariff rate on more than 400 goods with steel and aluminum components. This follows President Trump’s announcement from May, doubling tariffs on those imported metals in an effort to protect domestic producers. “We’re going to bring it from 25% to 50%, the tariffs on steel into the United States of America”, President Trump said at the time.

The expanded tariffs impact wires and cables, and other parts used in home appliances, electronics and cars. “Anything that takes a big amount of those raw materials as inputs, so cars, refrigerators, toaster ovens, soda cans, are certainly going to be affected“, said Columbia University Business School professor Rita McGrath. “And where the average consumer is going to see that is just increasing prices for a lot of these goods“. The tariffs would also impact the price paid for groceries.

Robert Budway is the former president of the Can Manufacturers Institute. He predicts higher prices for consumers after the initial announcement of 50% tariffs on steel and aluminum. “For can makers, we pass the costs of the tariff onto our customers who are the food processors, and then they pass the cost on to the consumer eventually“, Budway said. “So, it’s going to mean higher can food prices across the board for American consumers”. Those previous tariffs appear to already be impacting producers.

The price of domestic steel mill products was up nearly 9% in July from a year ago, and aluminum was up more than 13%, according to the latest producer price index report released last week. Economic indicators this week have showed new effects of President Donald Trump’s tariffs. This week the Producer Price Index, which tracks changes in sellers’ price points, surged unexpectedly. While the PPI does not explicitly include tariffs, it is one of several factors that show how price increases are directly tied to the costs of increased tariffs.

For American consumers, this could mean there are still higher price hikes ahead for everything from groceries to clothing to vehicles. “I think the evidence is pretty much clearly showing that it is the importer that is bearing the cost of the tariffs“, Said Alex Durante, senior economist at the Tax Foundation. “And right now, that is largely U.S. businesses“.

President Trump has insisted he wants big businesses to eat the cost of tariffs. He has doubled down on social media, saying tariffs haven’t caused any problems for America. But new Goldman Sachs research projects businesses will pass on higher price increases come fall. “If you look at the pre-tariff import price, they have actually risen slightly. If a foreign exporter was absorbing the tariff, those prices would fall“, Durante said. New data Friday from the University of Michigan shows consumer sentiment declined 5% in August, the first downturn in 4 months.

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