Tariffs, including what they are and how they work, can be complicated to understand. What’s more, if you are employed or run a business in an industry that relies heavily on metal, you may be wondering how tariffs will affect metal prices. Here’s a brief overview of what you need to know-
What Are Tariffs?
Tariffs refer to a type of tax that is paid on an import or export to the United States. The tariffs imposed under President Trump specifically impose a tax on imports to the United States, which is assessed at the border (of course, in response, other countries enacted a tariff on imports to their own countries from the United States).
The basic idea behind a tariff is this: because it increases the cost of the good to be imported, the cost should act as a deterrent, urging Americans to purchase locally-manufactured items instead of imported ones. While this is a nice idea, in theory, the problem is that the vast majority of goods in the United States are made overseas, or at the very least, contain parts that are manufactured overseas.
What Do Tariffs Mean for Metal Prices?
The tariffs that were enacted by the Trump administration a few months ago have meant that metal prices have increased. To be sure, in January, the cost of Ingot Premium aluminum was 10 cents a pound, and by mid-March (after Trump had announced the 10 percent tariff on aluminum), the price had jumped to 20 cents a pound. Steel underwent a similar price hike – in January, the cost of hot-rolled coil was $661 per short ton, and in March, the price had increased to $836.
When Will Tariffs End?
If you’re in an industry that relies on the import of metals, you may be curious about when the tariffs will end. The answer is unclear, but as of September 2018, Trump has said that he’s considered more tariffs, not fewer. As a leader who strongly believes that imports hurt America, he’s been vehement in his conviction that tariffs will make America a stronger country and global leader.
Recycling Scrap Metal Can Help
While no one can avoid tariffs, and your business may be forced to import and pay high taxes on your imports as such, recycling scrap metal can help. The recycling of ferrous and nonferrous materials like steel and aluminum reduces the need for additional imports from other countries, is good for the environment, and can be economically beneficial for companies.
We Can Help
To learn more about how we can manage your scrap metal processing and recycling needs, please call us today at 708-730-1400 or send our team a message today. We are a leader in the scrap recycling industry.