President Trump has doubled down on the steel and aluminum tariffs imposed during his first term, increasing the rate from 25 percent established in March to 50 percent as of June 4. In a new insight, Trade Policy Analyst Jacob Jensen discusses the likely outcome of these tariffs on the canned food industry, which occupies a market position directly downstream of steel and aluminum producers and nearby individual end consumers.

Key points:

• As was the case during President Trump’s first term, these tariffs will likely have a minimal impact on reversing the downward trend in steel and tinplate production, which has declined significantly since 2018.
• While the full cost of tariffs may not be immediately felt due to manufacturers’ prior contracts, many producers anticipate higher consumer prices in the coming year, as they will be unable to fully absorb costs by cutting margins or negotiating with foreign producers.
• If the 50-percent tariff remains in place, tariffs may end up accounting for up to 12 percent of can manufacturers’ total costs, which will undoubtedly be passed along to U.S. consumers; canned food products may see an even higher price increase as these input costs ripple throughout the supply chain.

Read the analysis.