An Update for the Industrial Supply Chain
On June 4, 2025, the U.S. government officially raised tariffs on imported steel and aluminum from 25% to 50%, marking a significant policy shift in an ongoing effort to support domestic metal producers.
This change is part of a broader trade strategy aimed at reshaping sourcing relationships and encouraging more domestic production. It comes as a deadline passes for key trading partners to submit updated proposals to avoid further tariff hikes scheduled for early July.
Some manufacturers may feel supported by these changes. Others may feel squeezed. Most will need to adapt.
Let’s take a closer look at what’s happening and what it might mean for your business.
What’s Changing?
-
Steel and Aluminum Tariffs Doubled
The tariff rate on many imported metals has been increased from 25% to 50%. This applies to a wide range of steel and aluminum products used across sectors like automotive, aerospace, defense, and energy. -
UK Exemption
The United Kingdom remains exempt from the new 50% rate due to a preliminary trade agreement. Products sourced from the UK will still carry the previous 25% tariff. -
Aluminum Premiums on the Rise
Market watchers have already reported increased U.S. aluminum premiums in response to the policy shift, as buyers anticipate tighter domestic supply.
Why It Matters
The impact of tariffs is rarely one-sided. They may help some companies—particularly domestic metals producers—while creating new challenges for others, especially those with complex or globalized supply chains.
For example:
- If you’re a U.S. manufacturer using imported metals, your raw material costs may rise.
- If your competitors source domestically and you don’t, you may face margin pressure.
- If you’re selling parts into global supply chains, your own customers may start asking harder questions about cost structure and lead time.
In other words: it’s time to evaluate your position.
What Should Manufacturers Do?
This isn’t a time to panic—but it is a time to plan. Here are a few things to consider:
1. Re-evaluate Your Sourcing Strategy
Now’s a good time to look at your bill of materials and see where your inputs are coming from. If you’re importing steel or aluminum, work with your suppliers to understand how these tariff changes will affect pricing and availability.
2. Review Contracts and Pricing Models
If you work with long-term contracts, consider whether your current pricing accounts for tariff volatility. You may need to bake in more flexibility or introduce a mechanism for adjusting pricing if your material costs shift significantly.
3. Talk to Domestic Suppliers
Even if you’ve relied on overseas metals in the past, it may be worth revisiting domestic options. Lead times, price stability, and logistics resilience are all part of the equation—not just cost per pound.
4. Stay Informed on Policy Developments
This is an evolving situation. The U.S. administration is still in talks with key trade partners, and new deals—or new exemptions—may be announced. Staying informed can help you get ahead of any new shifts.
What’s Next?
The administration has set a July deadline for countries to submit “best offer” proposals aimed at avoiding further tariff action. Depending on how these negotiations play out, we could see adjustments, carve-outs, or additional tariff hikes in specific product categories.
For manufacturers, this moment is a reminder:
Tariffs aren’t just a headline—they’re a supply chain reality.
Whether they work for or against your business depends on your preparedness, your sourcing flexibility, and your ability to adapt.
Source:
Reuters – Doubled U.S. metals tariffs kick in as deadline for ‘best offers’ arrives
This article is intended as an update for manufacturers navigating ongoing global trade shifts. For supply chain messaging support, The Right Horse is here to help.