Trump tariffs on steel, aluminum a ‘disaster’ for the U.S., think tank report says

U.S. President Donald Trump departs after speaking during a "Steel Across America" event ahead of the 25th anniversary of the September 11th attacks on the Ellipse near the White House on September 08, 2026 in Washington, DC. Photo by Andrew Harnik /Getty Images

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OTTAWA — U.S. President Donald Trump’s tariffs on steel and aluminum have been a “disaster” for the U.S. economy because they’ve fuelled inflation and failed to spur the promised growth in those industries, a new think report has found.

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The Montreal Economic Institute report, to be released Thursday, found that steel and aluminum prices in the U.S. market have soared since Trump slapped tariffs on those two critical industrial sectors, while failing to create new jobs.

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Not only have the tariffs led to sharply higher steel and aluminum prices, but the two sectors are key inputs in a wide variety of other products, the report found, that have also become more expensive. It’s left consumers and industrial buyers facing higher price tags on autos, aircraft, construction, machinery, and a wide range of other products.

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“The United States has imposed on itself a historically large price shock with little protected sector employment or output growth to show for it,” concluded the report, titled Tariffs Deliver a Price Shock, Not an Industrial Revival.

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The study, which is in line with economists’ broader analysis of tariffs, found that steel prices in the U.S. have jumped 33.9 per cent since February 2025, while aluminum prices have increased by 58 per cent. By comparison, prices in the Canadian market for those two metals have increased by only one and 26 per cent respectively.

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Trump imposed 25 per cent tariffs on steel and aluminum from a wide range of countries, including Canada, in March of last year. A few months later, those tariffs were increased to 50 per cent.

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The policy’s desired benefits have been modest at best. During that 19-month period, U.S. steel production has gained 7.6 per cent, with a 0.7 per cent increase in employment. Aluminum production, meanwhile, fell 0.1 per cent, while the number of jobs in that sector increased by just 0.6 per cent.

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“Trump’s tariff policy has not helped revitalize the industry as promised,” said Joseph Steinberg, an economics professor at the University of Toronto and the primary author of the study. “I don’t think a single economist will say tariffs on metal is a good idea.”

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And consumers and those industries that buy steel and aluminum for their own products have paid the price, according to Steinberg’s study. Without any changes to the inputs, the new steel tariffs alone would mean cost jumps of 6.5 per cent and 13 per cent, for example, in the auto and fabricated metals sectors.

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Jamie Tronnes, executive director of the U.S.-based office of the Canadian think tank the Macdonald-Laurier Institute, said she’s not surprised by the report’s conclusion and added that the tariff-fuelled price hikes on steel, aluminum and other inputs are also affecting investment decisions in the U.S. In some cases, she said, producers have decided to buy from China and elsewhere, instead of building or expanding their own operation in the U.S. because of the increased costs of construction.