Trump’s Steel and Aluminum Tariffs: How Could This Affect Your Portfolio?
Written by
Cynthia Measom
Edited by
Jenna Klaverweiden
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While the Trump administration has paused many reciprocal tariffs, certain tariffs are still in place, including those on steel and aluminum. The current rate is set at 25%.
These tariffs on steel and aluminum could raise costs for companies that depend on those materials. That has some investors questioning how their portfolios might be affected.
GOBankingRates spoke with a financial expert, who explained which industries are most at risk and what individual investors should be watching now.
Companies Most Likely Impacted
According to Kevin Shahnazari, founder and CEO of FinlyWealth, who has more than a decade of experience in fintech and financial analytics, the biggest impact steel and aluminum tariffs will likely have is on the U.S. manufacturers that rely on those imported products.
“Companies in auto manufacturing, construction and heavy equipment are at the front of that line,” he said. “Ford, GM, Boeing and Caterpillar could all feel the pressure as input costs rise. When raw materials get more expensive, profit margins shrink fast.”
Short-Term vs. Long-Term Investments
Shahnazari said that in the short term, investors should expect volatility. He explained that investors may react quickly to earnings downgrades and price hikes across key sectors.
“Long term, the story depends on how long the tariffs stay in place and whether they trigger retaliation,” he said. “If they disrupt global supply chains, companies might relocate operations or delay capital investments, which can drag down performance over time.”
What Individual Investors Should Do
Luckily, there are some things investors can do.
“Watch earnings reports from industrial, auto and construction companies,” Shahnazari said. “Pay attention to forward guidance and margin trends. If you’re overweight in cyclical or manufacturing-heavy sectors, it might be time to rebalance toward defensive plays like consumer staples or healthcare. Diversification is not optional right now; it’s critical.”
2018 Tariffs Offer Insight Into What Might Happen Next
And this isn’t the first time investors have seen steel and aluminum tariffs. In 2018, the first Trump administration imposed a 25% tariff on steel and a 10% tariff on aluminum.
“The 2018 tariffs under the Trump administration showed a short-term boost for domestic producers but real pain for manufacturers downstream,” Shahnazari explained. “Markets dipped briefly and rebounded, but certain sectors lagged for months. That history suggests that unless these tariffs spiral into a trade war, the broader market can absorb the impact, though individual companies could take serious hits.”
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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