Groceries Go High: Trump's Tariffs on Steel and Aluminum Hike Prices Suddenly, Unexpectedly
Escalation in steel tariffs may jeopardize Trump's vow of reduced supermarket costs
By MAtt SEDENSKY 📝 Contact Matt 🌍 Link to Matt's Portfolio
It's time to break open the wallet a bit more: President Donald Trump's latest tariff hike on foreign steel and aluminum could send groceries soaring.
Friday's announcement of a 50% levy on these imports has raised fears of steep price increases on big-ticket items like cars, washing machines, and houses. But, as it turns out, these metals are common as ketchup in packaging, making them a hidden, yet substantial, cost-driver across the grocery aisles.
"Prepare for grocery bills to climb," warns trade expert Usha Haley, professor at Wichita State University. "Steel and aluminum tariffs have the potential to raise costs for manufacturers across industries, leaving consumers bearing the brunt."
Trump's Unpredictable Tariff Blitz
Since Trump's return to the White House, tariffs have become his favorite weapon, with threats, additions, and, often, withdrawals, in a rollercoaster whirlwind that leaves observers dizzied. This time, Trump claims the tariff rise is crucial to "solidify the steel industry in the U.S." Yet, this promise might conflict with his pledge to lower food costs.
Remember, rising grocery prices are one of the reasons Trump lured voters into his camp. Take a tour of a supermarket and you'll see a multitude of goods that could be impacted by new tariffs on steel and aluminum, from beverages (beer and soda) to pet food to countless cans of beans, fruits, tomato paste, and more.
Can Manufacturers Cry Foul
Robert Budway, president of the Can Manufacturers Institute, claims the increased tariff will push up the cost of canned goods. "China and other foreign canned food producers are happy to undercut American farmers and food producers," Budway insists. "These new tariffs will only exacerbate the problem."
Tariffs Across the Aisle
- European Union Arming for Countermeasures against US Tariffs
- White House Aides Say Tariffs Here to Stay
- Spike in Tariffs Threatens Trump's Promise of Lower Food Prices
- The Fate of Trump's Tariffs After a Court Ruling Knocks Them Down
Production of tin mill steel, a key material in can manufacturing, has dropped dramatically in recent times, leaving manufacturers stuck with imported materials. When prices go up, Budway says, "consumers will be the ones in the hot seat."
Food companies, already wary of Trump's tariff storm, had been cautiously assessing the impact. The Campbell Co., synonymous with soup cans, has disclosed it's working on shielding itself from tariff impacts but might be forced to hike prices. Similarly, ConAgra Brands, known for an array of products from Reddi-Whip to Pam cooking sprays, has alerted to tariffs' impact on steel and aluminum.
"We can't get all our materials from the U.S. because there's no supply," ConAgra CFO David Marberger pointed out at a recent Goldman Sachs global staples conference.
A Chain Reaction: Groceries vs. Steel
Beyond the obvious victims - canned foods like tuna, chicken broth, and cranberry sauce - economists foresee a ripple effect. If the cost to construct a store or purchase a truck to transport food rises, the prices of products may follow.
"It plays into China's hands," warns international business advisor Babak Hafezi from American University. "A price hike on big-ticket items like tractors trickles down the economy and affects everything from groceries to housing costs."
Trump basked in the applause of steelworkers as he introduced the new tariffs at a rally in Pittsburgh. The United Steelworkers International union, representing steelworkers, called tariffs a "valuable tool in balancing the scales" but emphasized the necessity of broader reforms in global trade.
While it might be easier to fathom the difference a tariff makes on a can of chickpeas versus a new car, most consumers will feel the financial pinch across various indirect costs, asserts Andreas Waldkirch, an economics professor at Colby College. "The short-term winner is the steel industry," Waldkirch says, "but the long-term costs could prove devastating."
[ Selected Enrichment Insights: Tariffs on foreign steel and aluminum can significantly impact grocery prices and consumer products through several channels, including increased packaging costs and ripple effects leading to broader price hikes across industries. ]
- The tariffs on foreign steel and aluminum announced by President Donald Trump could potentially raise costs for manufacturers in various industries, leading consumers to bear the brunt of higher grocery bills.
- Food companies, such as Campbell's and ConAgra Brands, are already cautiously assessing the impact of new tariffs on steel and aluminum, indicating a possible need to increase prices due to the tariff-induced price rise of steel and aluminum used in packaging materials.
- As a result of these tariffs, many economists foresee a ripple effect, suggesting that not only will food prices increase but so will the prices of other goods like houses and cars due to the cost of construction and transportation.
- The European Union, White House aides, and advocates for broader global trade reforms have expressed concerns about the tariff blitz, highlighting potential countermeasures, long-term costs, and the need for reforms in global trade that go beyond tariffs.
