EXPERTS CONCERNED THAT TRUMP TARIFFS ON STEEL AND ALUMINUM COULD NEGATIVELY IMPACT THE MILITARY
President Donald Trump has talked about raising tariffs for quite some time and now that he’s back in office, it appears to be a campaign promise he intends to keep. There have already been threats of tariffs involving the deportation of immigrants, however, experts are warning that increasing these costs could negatively impact the military and the general economy. It’s still early but tariffs on China, Canada, and Mexico have already been implemented. Now, even tariffs on steel and aluminum are being implemented, which will affect those nations further and likely drive up the cost of production for many essential products used throughout the defense industry.
Will Trump Actually Do Tariffs?
Trump tariffs aren’t just a talking point. The President is looking at a wide range of tariffs and many of the materials that would be affected are directly tied to the defense industry.
While the idea behind tariffs is to help bolster the American economy, such measures could backfire by driving up the cost of materials and to make matters worse, delays should also be expected.
The goal is to make the United States less dependent on steel and rare earth materials, supplies essential for the creation of critical tech used in national defense. However, the costs of doing so may be higher than the benefits.
New Executive Order Imposes 25% Tariffs on Steel and Aluminum
On February 10, 2025, President Donald Trump imposed a 25% tariff on imported steel and aluminum into the United States. The new executive order leaves no room for exceptions and will affect trade with Canada, Brazil, and Mexico, where the U.S. receives most of its steel, even if it’s being aimed at affecting China.
Trump’s EO is only adding to those already in place, with policies implemented under his first term placing a 25% tariff on steel and 10% on aluminum, which the Biden administration kept. The result led to suppliers going elsewhere to supply their resources resulting in a trade war that became even more complicated due to the COVID-19 pandemic. Since then, pre-tariff levels have never returned for U.S. producers.
Despite few Chinese imports involving steel, from secondhand methods, where foreign countries purchase the materials and then sell them to the U.S., the materials still make it into America. Furthermore, mislabeling can also occur, causing it to be resold to U.S. companies. However, the Trump administration is working to close loopholes and balance trade dynamics.
Trump already implemented a 10% tariff on all Chinese imports before his measure involving steel and aluminum, which resulted in China retaliating with tariffs on specific chips and metals and the POTUS scaling back his original EO.
Still, the U.S. Department of Commerce is developing a tracking system, which could see tariffs return. The 25% tariffs Trump ordered involving Canadian and Mexican importsis also being paused until at least March 1, 2025.
Trump’s Tariffs and the Defense Industry
Aluminum, copper, iron, and steel are all on the table facing Trump’s tariffs during his second term.
These essential supplies are a part of the defense industry in too many ways to list, affecting everything from guidance systems to shipbuilding to aviation and virtually everything else.
Trump is still looking at when to implement tariffs, exactly how to implement them, and other fine details, but the belief is that such measures will still come to be.
Experts still wonder how this will affect our economy and national defense as higher costs could backfire on the U.S. military.
Rising Costs
One of the biggest concerns for opponents of the tariffs is that by elevating the supply cost for these commodities, companies pass on the costs to consumers.
Furthermore, capitalism can allow companies to raise prices regardless due to the new market conditions where one company raises its price, so competitors follow suit.
Production delays may also create supply chain issues, similar to those seen during the COVID-19 pandemic.
One notable, vulnerable industry that is already facing hardships is shipbuilding.
The United States is struggling to keep up and has lost most of the industry overseas already, and disruptions to steel would be critical for the Navy.
Many experts believe that Trump’s tariffs would hinder naval defense by setting back the industry even further.
Backlash for Americans
Trump’s second-term plan tariffs could affect much more than just matters of national defense, everyday Americans could see an increase in consumer costs, strain supply chains, and more disruptions, particularly in industries reliant on imported materials.
This means that Veterans working in such industries should also be prepared for the possibility of higher costs for everyday goods and their employment prospects.
For those working in the defense industry, there is also some hope that the Trump administration will invoke the Defense Production Act (DPA) to prioritize military needs and expand domestic manufacturing capacity.
Still, temporary shortages and higher costs could be a reality soon as industries adapt to the changes.
What Were Trump's Tariffs Used for in His First Term?
The idea of using tariffs isn’t new for Trump. During his first term in office, there were key tariffs that affected aluminum, steel, solar panels, washing machines, and more.
This would, of course, create retaliation from rival nations, particularly with China, who the tariffs were aimed at in the first place.
However, many other nations faced U.S. tariffs and also retaliated with their own on U.S. goods, including the European Union, Canada, and India.
Studies have shown that Trump’s tariffs during his first term acted similarly to a significant tax increase, despite his tax reforms, hindered the real income of Americans, and even hurt some elections for the Republican Party.
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