A Progressive Policy Institute analysis argues Section 232's 50% tariffs on steel and aluminium have created a 'manufactured scarcity' in the US metals market. US steel hit $1,208 a tonne in June 2026, versus a $490 global average, as output and consumption trail pre-tariff levels.
At a glance
- Section 232 tariffs of 50% now cover steel, aluminium and semi-finished copper imports from Canada and Mexico.
- US steel prices hit $1,208 a tonne in June 2026, more than double the $490 global average.
- Manufacturing's share of US GDP fell from 3.1% in 2017 to 2.6% in early 2026 despite the tariffs.
Background
Section 232 of the Trade Expansion Act lets the US president impose tariffs on imports deemed a threat to national security. Washington has used it since 2018 to protect domestic steel and aluminium producers. The Progressive Policy Institute (PPI) is a Washington think tank whose September 25, 2026 analysis argues the tariffs have raised prices for metal-buying industries without a matching boost to US output.
What the analysis found
The PPI analysis found that Section 232 tariffs are now 50% on steel and aluminium, and also cover Canadian and Mexican metal and semi-finished copper. Those tariffs have pushed US steel prices well above the rest of the world. US steel averaged $758 a tonne in January 2025 against a global average of $456. By June 2026, the US price had risen to $1,208 a tonne, while the global average moved only to $490.
Aluminium is under the same 50% tariff and now trades around $4,500 a tonne in the US market, the analysis said. Despite these price gains for domestic producers, PPI found little corresponding rise in output.
Why higher prices haven't meant higher output
US steel production stood at about 82 million tonnes, close to the 2019-2025 average of 81.3 million tonnes but still below the 84-million-tonne norm seen from 2010 to 2017. Apparent steel consumption fell to 95 million tonnes against a 2000-2017 average of 104 million tonnes, suggesting buyers are using less steel rather than switching to domestic supply.
PPI links this to the tariffs raising costs for manufacturers that buy steel and aluminium as inputs, rather than mainly helping metal producers expand. The analysis points to new car prices rising by about $2,000 as one visible effect, since vehicles use large amounts of both metals.
What it means for US industry
The analysis frames the tariffs as a transfer from metal-consuming industries to metal producers rather than a net gain for US manufacturing. It notes that manufacturing's share of US GDP fell from 3.1% in 2017 to 2.6% in early 2026. That decline spans a period covering multiple rounds of tariff increases on steel, aluminium and now some semi-finished copper products.
Our read
Outlook: bullish. Section 232 tariffs mechanically keep US aluminium and steel prices elevated versus the rest of the world by restricting import competition, a gap PPI's analysis says has persisted for over a year with no sign of near-term change.
What to watch
- Whether Section 232 tariff rates change in any future US trade negotiations.
- US manufacturing GDP share and vehicle prices in coming quarters for further tariff pass-through effects.
- Whether the gap between US and global steel and aluminium prices narrows or widens.
For information only, not investment advice.
Aluminium price in India
metalscost.com India reference price as of 2026-10-03.
Detailed analysis
Timeline
- 2025-01-01: US steel price at $758 a tonne versus a $456 global average, PPI says.
- 2026-06-01: US steel price rises to $1,208 a tonne versus a $490 global average.
- 2026-09-25: PPI publishes its 'manufactured scarcity' analysis of US metals policy.
Technical view
Price is mixed relative to its 20-period and 50-period moving averages, showing no clear trend alignment.
Computed from metalscost.com's own stored price history.
United States
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