CODDLING America’s steel industry has long been a policy of presidents from both sides of the political aisle. Donald Trump, in that respect, is not unusual. Yet no recent predecessor has been as aggressive in wielding tariffs to that end. In his first term Mr Trump imposed a 25% levy on steel imports and 10% on aluminium, though he granted exemptions to some trading partners, including Brazil and South Korea. On March 12th the tariff wall is due to rise higher still. A new 25% levy on all imported steel and aluminium products, with no exclusions, will come into force, as well as a bonus 25% tariff on products coming from Canada, which the president announced on March 11th. The measures are not only unlikely to raise domestic production of the metals. They will also cause many American companies pain.

American industry imports a sizeable share of the metals it needs. Steel imports represent about a quarter of consumption. American steelmakers also export some products, bringing net imports to around 15% of American demand. For aluminium, net imports account for fully 80% of consumption, with Canada the single largest source. Most of the aluminium America now makes comes from melting scrap, rather than so-called primary production.

Some metals bosses are delighted by Mr Trump’s new tariffs. In January Leon Topalian, boss of Nucor, America’s biggest steelmaker, bemoaned the various exemptions that the first Trump administration granted on customs duties, and called for the tariffs to be expanded. Since Mr Trump’s announcement in February this year that his administration would do so, Mr Topalian’s firm has already raised prices, as have US Steel and Cleveland-Cliffs, America’s two other big steelmakers. The price of aluminium has also ticked up. Last month Jesse Gary, boss of Century Aluminum, America’s largest primary-aluminium producer, noted that his firm was expecting the tariffs to have a “material impact” on profits.

The extent to which that will translate into more production—and jobs—is less clear. For years American steel output has hovered at around 75% of capacity. The Trump administration wants to raise that to 80%. Yet production of both steel and aluminium barely budged after Mr Trump’s first round of tariffs in 2018. Although Century Aluminum has announced that it is building the first primary smelter in America in nearly half a century, doubling domestic primary production, that decision is in part a result of a $500m grant last year from the Department of Energy. In February Bill Oplinger, boss of Alcoa, another big aluminium producer, said that the tariffs would not be enough to entice his company to reopen facilities in America, arguing that electricity prices were a bigger constraint. Mr Oplinger added that it was difficult to make decisions “without knowing how long the tariffs will last”, because his company plans on “a horizon of 20 to 40 years”.

American manufacturers of everything from cars to kitchen appliances, which rely on the metals, are likewise grappling with the uncertainty generated by Mr Trump’s seemingly erratic tariff threats, and assessing the pain they will inflict. According to BCG, a consultancy, the duties on metals announced in February will add $22bn to the cost of steel and aluminium imports, and as much as $29bn for derivative products, from aircraft parts to bulldozer blades.

Mr Trump’s levies will be especially punitive for companies where metals make up a big portion of their costs. Consider construction equipment. According to Barclays, a bank, steel accounts for more than a tenth of the cost of goods in equipment such as backhoes and excavators. Crown and Ball, two makers of aluminium cans for fizzy drinks and beer, will see the cost of a 12-ounce can go up by about a tenth; the malleable metal accounts for around two-thirds of the total cost. America’s oil industry will also be hurt: about 40% of the various types of steel used to drill oil wells is imported.

Some companies will minimise the blow from tariffs by switching to alternative inputs. Coca-Cola has said that it will probably put more of its fizzy drinks in plastic bottles. But many will not have that luxury. In a letter to Mr Trump last month, the Can Manufacturers Institute, a group that represents can-makers and procurers, pointed out that, by raising input prices, the 2018 tariffs crushed makers of tinplate steel, a thin plate of steel coated with tin that is commonly used for canned food. The industry mothballed nine production lines, “contrary to the intent” of the duties. Only three lines now remain. Consumers may soon be grumbling about the price of baked beans. ■

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