Economics professor explains steel tariff impact on business owners, consumers

BIRMINGHAM, Ala. (WBRC) – President Donald Trump officially announced 25% tariffs on steel and aluminum imports. It’s the latest in a flurry of tariffs he’s enacted in less than a month since taking office.

“Our nation requires steel and aluminum to be made in America, not in foreign lands,” said the president. “We need to create in order to protect our country’s future.”

The subject of tariffs can be quite daunting but it’s important to understand how these specific taxes impact the economy, what you buy, and ultimately your wallet.

“If I want to import something like aluminum or steel and I want to bring it into the United States, I have to pay a tax, the actual tariff,” explained UAB Asst. Professor of Economics Ben Meadows. “Now, the thing that happens is when I pay that tax as a business, when I pay that tariff, I can’t just eat that cost and go on living my life. I will have to raise my prices for whatever I’m producing. I’ll have to raise the prices to account for that tariff.”

The last time the US placed a tariff on steel and aluminum in 2018, Meadows said big businesses saw immediate effects.

“There were a lot of quotes by Ford and Harley Davidson or even I think Harley Davidson was quoted as moving some of their manufacturing facilities to account for the tariff,” he added.

For small business owners in Central Alabama though, he said you won’t notice an evident price hike as quickly.

“If you’re at a bakery, right? If you’re thinking of an aluminum pan, you don’t have to replace that right now,” said Meadows. “It would only be when you replace it and likely, you’re going to be feeling inflation plus tariffs when you buy that aluminum pan.”

As for American steel producers: “If you’re producing these domestically, this is a win for your business.”

But is it a win for you? WBRC asked what can you do to prepare for a tariff that could impact you.

“As an economist, it reminds me a lot of the questions we asked: what can we do to fight inflation?” he remembered. “What can each individual person do to fight inflation or be prepared for tariffs? The sad answer is nothing. An individual consumer cannot really fight large, macroeconomic forces on their own.”

Whether you own a small business, or you’re just a regular person who makes purchases, it’s a waiting game.

Meadows said we’re not sure just how big of an impact the tariffs will be, one way or the other, to the general public until they are put into place and the chain reaction actually happens.

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