How Section 232 steel tariffs are reshaping the US supply chain and manufacturing industry

The expansion of Section 232 steel tariffs is creating ripples across the US supply chain, affecting industries far and wide. From the escalating cost of raw materials to shifts in demand and production strategies, businesses are adjusting to the new realities of a tariff-driven market.

Steel producers, distributors and end users took a range of views on the second round of Section 232 steel and aluminium tariffs on Wednesday March 12, the first day they formally came into effect. The effective tariff increase to 25% hit all imports of steel and aluminium, as well as derivative products made from the metals; prior exemptions and quotas have expired.

While the threat of tariff pressure has been pushing steel prices up — in line with industry sentiment — the overall effect of the tariffs on the health of the steel supply chain remains an open question.

Some downstream producers are opposed to pitting an increase in prices against lackluster consumer demand, while others are encouraged by the new tariffs’ inclusion of derivative products.

“Including steel derivatives makes a lot of sense,” said Alliance for American Manufacturing president Scott Paul in a March 12 statement. “This addition will ensure that importers can’t game the system and American companies that make these products have a level playing field.”

One steel distributor and heating, ventilation and air conditioning (HVAC) manufacturer — as well as a long-time tariff supporter — told Fastmarkets that he is concerned that tariff-driven price increases may not hang around without an uptick in demand.

“I think the tariffs will continue to cause consumers to ‘panic’ buy, though I don’t know how much longer that will stick without the demand,” the distributor said.

“Even though we are getting a lot of calls, many customers are still getting ‘deals’ from service centers that are not raising prices when they should be. If the tariffs end up coming off or being watered down, I could see the price of steel dropping again, especially since scrap for March isn’t as stellar as experts once thought it would be,” the source added.

At the other end of the market, at least two major steel producer trade groups praised the new round of Section 232 tariffs.

American Iron and Steel Institute (AISI) president and chief executive officer Kevin Dempsey praised the new tariffs’ lack of an exclusion process which foreign producers allegedly “exploited as a loophole.”

“AISI applauds the president’s actions to restore the integrity of the tariffs on steel and implement a robust and reinvigorated program to address unfair trade practices,” Dempsey said in a March 12 statement. “America must have a sustainable, commercially viable steel industry to meet its national security needs.”

The sentiment was echoed by Philip Bell, president of the Steel Manufacturers Association.

“As the revised steel tariff goes into effect [on March 12], President Trump is boldly declaring that America will no longer be a dumping ground for cheap, subsidized foreign steel,” he said. “By closing loopholes in the tariff that have been exploited for years, President Trump will again supercharge a steel industry that stands ready to rebuild America.”

Learn more about our reliable data-driven insights, market-reflective prices, forecasts and analysis.

What to read next
The US trade roller coaster ride seems to be flattening, with signs of potential moderation and stability. It appears increasingly likely that our original expectation that the US Trump administration would primarily use the threat of tariffs as a negotiating strategy will be correct. While we do not expect to the US tariff position return to pre-2025 levels, we believe the overall US tariff burden is more likely to settle at around 10-30% globally rather than the elevated rates of 50-100% that seemed possible in recent weeks.
Learn how timber imports affect the US economy regarding Canadian softwood lumber and future trade policies.
The Mexico Metals Outlook 2025 conference explored challenges and opportunities in the steel, aluminum and scrap markets, focusing on tariffs, nearshoring, capacity growth and global trends.
The recent US-China agreement to temporarily reduce tariffs is a major step for global trade, with tariffs on US goods entering China dropping from 125% to 10% and on Chinese goods entering the US decreasing from 145% to 30% starting May 14. While this has boosted markets and created optimism, key industries like autos and steel remain affected, leaving businesses waiting for clearer long-term trade policies.
BEK pulp prices in Europe dropped $40/tonne in April, driven by US import tariff uncertainties and weaker demand in China.
Fastmarkets proposes to amend the frequency of Taiwan base metals prices from biweekly to monthly, and the delivery timing for the tin 99.99% ingot premium from two weeks to four weeks.