The recent decision by the United States to double tariffs on steel and aluminum to 50% of imported value is causing significant disruptions across the American industrial value chain, according to an analysis released today.
Coface reports that domestic prices have surged, and by 2025, U.S. regional indices had already shown increases of 20% for steel and 65% for aluminum compared to the beginning of the year.
Nonetheless, steel production in the U.S. fell 2% in the first four months of the year, aligning with the global trend, according to the insurer.
In the medium term, the insurer believes the consequences are likely to be felt in the profit margins of industrial companies, especially in the automotive sector, which will be doubly affected by higher upstream costs and decreased competitiveness downstream.
In the long term, Coface identifies an unlikely potential winner: Mexico, asserting that Mexican automobile exports to the U.S., meeting USMCA agreement requirements, are exempt from these tariffs.
“At the same time, production costs in the U.S. could become so high that Mexican factories gain increased competitive advantage—creating a market distortion with significant geopolitical effects,” it states.
Coface considers that the protectionist escalation in the U.S. might be more symbolic than strategic, with real risks for the American industry, especially if the collateral effects on the manufacturing sector worsen in the coming months.
“The measure aims to protect national production but raises doubts about its economic effectiveness and the real impact on industrial employment,” the insurer notes.
The tariffs were announced by U.S. President Donald Trump at the end of May, during the presentation of a strategic partnership between US Steel and Japan’s Nippon Steel, which plans a $14 billion investment in American factories over the next 14 months. The stated intention is clear: to reduce U.S. dependence on imports and boost its metallurgical industry.
