Steel Products Manufacturers NAICS 3312

May 21, 2025 - Tariffs Impacting Small Fabricators

• Tariffs on steel and aluminum imports to the US have a direct impact on small fabricators’ cost structures, bidding strategies, and overall competitiveness, according to Exiil, a provider of software to metal manufacturers. In March, President Trump raised steel and aluminum import tariffs to the US by 25%, ending all country exemptions, in addition to hiking tariffs on China, according to Reuters. Russian aluminum imports carry a tariff of 200%. Beyond raw metal, the US has increasingly added “downstream” or “derivative” products – such as stamped parts, fasteners, tubing, wire, or other items with high steel/aluminum content – to existing Section 232 tariffs. As a result, metal fabricators face higher materials costs. Even businesses that source metals domestically are likely to pay more as US mills often raise their prices when foreign competitors’ costs go up – because the “floor” of the market shifts.
• While many businesses are struggling to respond to President Trump’s tariff turmoil, higher trade barriers are creating opportunities for some small US manufacturers, The Wall Street Journal reports. Ellwood Group, a maker of forged steel, nickel and aluminum products, is one company that's getting a boost from the tariffs, according to WSJ. The Pennsylvania-based business saw its sales jump 35% from the fourth quarter to the first, driven in part by 25% tariffs on steel and aluminum that only came into effect in mid-March. One reason: Large construction projects that use finished steel are diversifying away from Asian suppliers to US companies that buy its raw materials. “Customers want to get ahead of the tariffs,” said Ellwood’s Chairman David Barensfeld, adding “They are diversifying, reshoring because they want to de-risk foreign supply chains.” The company is adding staff amid increasing new orders.

• President Trump’s aggressive trade policy is undermining his efforts to get US energy producers to drill for more oil and gas by raising drilling costs and driving down the price of oil, NBC News reports. In March, the administration raised the tariff on steel imports to the US 25%, driving up the cost of raw steel used to make the steel pipe used by energy companies. Tariffs are reducing the supply of foreign steel in the US market leading to higher costs for manufacturers. Moreover, US steel makers began hiking prices in February in anticipation of the tariffs. Producer prices for iron and steel pipe and tube manufacturing from purchased steel, which had been falling, rose 5.6% in March versus February, according to the Labor Department. In April, US oil prices sank to their lowest level since 2021 on concerns that the tariffs will hurt economic growth.
• Employment by steel products manufacturers grew 2.9% in March compared to a year ago, while average wages at primary metals manufacturers rose 3.6% year over year in April to $29.83 per hour, down from their record high in March, according to the latest US Bureau of Labor Statistics data. Rising payrolls amid declining sales and producer prices crimped industry margins last year. Sales for iron, steel, and ferroalloys companies declined 12.1% year over year in Q4 and were down 6.1% from Q3, while after-tax profits sank 73.7% YoY in Q4 and 47.9% from Q3, according to Census Bureau data.