Aluminum & Steel Tariffs Drive Costs Up 21%: Practical Steps for LSPs to Protect Margins

US-Canada Steel & Aluminum Tariffs (2025) -Key Dates and Information

March 12, 2025: U.S. implemented 25% tariffs on all steel and aluminum imports, removing country exemptions including Canada.
March 12–13, 2025: Canada imposed retaliatory tariffs (25%) on U.S. goods (steel, aluminum, computers, equipment), totaling initially C$30 billion.

Immediate Supply Chain Impacts

🔹 Steel Import Surge (Pre-tariff)
U.S. steel imports from Canada & Mexico increased by 32% in January 2025 vs. December 2024, totaling 1.02 million tonnes. (Reuters)

🔹 Price Increases due to Tariffs

Metric	Value / Impact
Hot-rolled coil steel price (futures, Mar)	Increased +$166 to ~$925/ton (+21% since Jan)
2025 Avg. U.S. Steel Price (forecast)	$890/ton (+15% YoY) compared to 2024
Additional cost per new home	+$7,500–$10,000 due to tariffs

Logistics Impacts and Border Delays

Immediate congestion at major border crossings (Detroit–Windsor corridor), increased documentation causing delays for automotive JIT supply chains.
U.S. Customs reported “implementation challenges” creating border bottlenecks

Regional & Corridor Specific Impacts

Region / Corridor	Key Issues	Industries
Detroit–Windsor	Severe border delays, disruptions in JIT supply chains	Automotive
Ontario, Quebec	Inventory buildup, export slowdown to U.S.	Automotive, Aluminum
U.S. Midwest (OH, IN)	Steel price increases (~20%), manufacturing delays	Automotive, Construction
U.S. Sunbelt (FL, TX)	Higher material costs, delayed steel/aluminum delivery	Construction

Immediate Industry Responses

🔹 Automotive Sector

Negotiated short-term tariff exemptions for USMCA automotive parts imports (30-day pause).
Considering increased inventories (“just-in-case”) and alternative sourcing.
OEMs contemplating cost pass-through to suppliers/customers over time.

🔹 Construction Industry

Contractors including “tariff escalation clauses” in contracts.
Increased early purchasing and material stockpiling to hedge against future price hikes.

🔹 Logistics Providers

Advising clients on Foreign Trade Zones (FTZs) and bonded warehouses to defer immediate tariff payments.
Re-routing shipments to avoid congested border crossings.
Increased daily client communication about border delays and compliance requirements.

Mitigation & Countermeasures by Industries

🔹 Alternate Sourcing & Markets

Alcoa (Quebec-based aluminum producer) exploring alternative global markets to offset reduced U.S. demand.

🔹 Strategic Inventory & Warehousing

Businesses widely adopting FTZs/bonded warehouses to manage cash flow and delay tariff payments.

🔹 Efficiency Gains & Cost Absorption

Automotive suppliers optimizing metal usage or considering substitute materials where feasible.
Construction contractors adjusting project designs/material choices for cost efficiency.

Practical Recommendations for Logistics Providers

Real-Time Visibility: Monitor border/customs updates closely; recommend platforms like Tradlinx for enhanced logistics tracking.
Enhanced Communication: Regular client updates on tariff impacts, proactive adjustments to logistics strategies.
Flexible Routing: Quick adaptation of routes, minimizing tariff and congestion impacts.