Visit any news site and you’d be hard pressed not to find information about the recent imposed tariffs by President Donald Trump. With considerable volatility around these tariffs at the moment, leaders across all industry segments are paying close attention to this evolving landscape. For metal recyclers, these fluctuating tariffs are keeping them on their toes, unsure of what the metal recycling landscape may look like in the near future.
As of June 4th, the administration imposed 50 percent tariffs on imports of steel and aluminum from all countries. With other products, the administration has changed or lowered rates after setting an initial percentage tariff, so it’s still to be determined how long the 50 percent tariff will last.
“Because of this, manufacturers lack the certainty around rates to take decisive action on their sourcing strategies,” said Bill Graca, director of global manufacturing strategy at Slalom Consulting. “Tariffs will raise costs, causing financial strain for almost all manufacturers using imported metals. Because of increased costs, we can reasonably assume that there will be an increase in manufacturers leveraging recycled materials to secure source material.”
Graca further explained that manufacturers will have to find reliable domestic sources for recycled metals that can meet their supply needs.
“There are domestic partners in this space that could potentially fill sourcing gaps. The challenge right now is that this space is highly fragmented, so we could see some investment and rapid industry consolidation in this space,” Graca said. “The steel industry is resilient. Domestic players have weathered storms in the past, so despite current uncertainties or temporary slow-downs, the industry remains strong.”
Dale Crawford is the executive director for Steel Tube Institute, an organization that brings together producers in the steel industry to advance the use of electrical steel conduit. Crawford pointed out that Section 232 tariffs remain in place and continue to serve as a critical safeguard for U.S. steel producers.
“However, despite these measures, illegal dumping of steel has persisted through tariff circumvention tactics such as transshipment and misclassification,” Crawford said. “This highlights a key challenge – while the policy itself is sound in intent, its impact is undermined by inconsistent enforcement and loopholes exploited by importers. As a result, domestic manufacturers have not seen the full benefits of the protections envisioned under the original framework, and the steel market remains vulnerable to unfairly priced imports.”
Crawford explained that one of the primary concerns is uneven enforcement, which has historically allowed some importers to circumvent tariffs through misclassification or transshipment. This undermines the intended protections for domestic manufacturers. Another key issue is uncertainty, both around how new tariffs might be implemented and how they could affect pricing, input availability and long-term investment planning.
“While the industry broadly supports measures that level the playing field, it also calls for clarity, consistency and effective oversight to ensure the rules are applied fairly and transparently,” Crawford said.
If enforcement remains inconsistent, the biggest challenge will continue to be unfair competition from illegally dumped imports, even under a tariff regime. Crawford said that this puts legitimate U.S. metals manufacturers at a disadvantage and creates pricing instability that makes long-term planning and investment more difficult.
“Additionally, companies may experience increased administrative and compliance burdens as they navigate a complex import environment,” Crawford said. “The tariffs must be paired with robust oversight and importer accountability to be effective. Without adequate enforcement, these challenges can ultimately outweigh the intended benefits.”
Craig Powell, president, North America, head of BU Steel North and South America for RHI Magnesita, said that one of the main concerns for the metals industries and their suppliers is how they will manage to cover or find solutions to mitigate the increased cost created by the tariffs.
“Refractories are critical for all kinds of high temperature manufacturing processes – be it steel, cement, aluminum, glass or any nonferrous metals making,” Powell said. “However, we are now facing import tariffs on critical raw materials and finished goods.”
Powell said that raw material onshoring is more challenging, as certain materials like magnesite/ magnesia are not available in North America.
“Refractory recycling is one way that can partially resolve the raw material imports challenge. Spent refractories can be crushed and used as secondary raw material in place of virgin raw material, thus reducing dependence on raw material resources outside of the region,” Powell said. “However, with the currently available technology, a maximum of 30 percent of used refractories can be recycled to produce secondary raw materials. Until these solutions are put into place, we are compelled to pass on 100 percent of the tariff cost as a surcharge to our customers in the U.S. This would potentially increase the cost of production for metals producers.”
Powell further pointed out that tariffs are likely to cause metals producers and their suppliers to do what they can to continue onshoring production and supply chains. While this may ultimately be positive for the industry, the path to get there is not clear cut and takes time.
“Suddenly, manufacturers who were previously relying on imports are going to have demands for local resources, from materials to labor to transportation,” Powell said. “With a rapid increase in demand, metals producers and their suppliers will face constraints. In the immediate term, this may lead to production delays and struggles with supply chain availability, and in the end, will impact day-to-day consumers and metal recyclers.”
Being in the industry for over 30 years, Powell has seen the market ebb and flow.
“It’s intense in the moment but always critical to look toward the future,” he said. “Steel and metal producers are looking into innovative technological solutions to increase safety and efficiency while reducing negative impacts on the environment. I look forward to seeing the continued transformation of the industry as a whole.”
Impact on Metal Recyclers
As manufacturers look for cost-effective solutions, it is expected that recyclers will see renewed demand for recycled metals. That’s why supply chain transparency will be crucial for all parties so that organizations can make more informed sourcing decisions and rapidly develop and run scenarios that might inform how and where they partner to secure critical supply.
“This comes through data transparency and intelligence,” Graca said.
Crawford added that metal recyclers play a critical role in the domestic steel ecosystem. If tariffs are properly enforced and reduce the flow of illegally dumped steel, domestic production stands to increase, which directly supports greater demand for scrap and recycled materials – particularly from electric arc furnace (EAF) steelmakers, who rely heavily on scrap as a raw material.
“However, when tariffs are circumvented and imported steel floods the market at artificially low prices, it suppresses domestic output and hurts demand for U.S.-sourced scrap, impacting pricing and material flow,” Crawford said. “For the recycling industry, consistent enforcement is key. Without it, the benefits of trade protections won’t reach the broader supply chain, including those who play a crucial role in the circular economy.”
Broadly speaking, Crawford stressed that the U.S. steel industry remains resilient and globally competitive, thanks to decades of innovation, modernization and a highly skilled workforce. Still, real challenges persist.
“Illegal dumping continues to undermine fair competition, even with tariffs in place, and global overcapacity distorts market pricing. The industry also faces increasing pressure to decarbonize, align with evolving customer standards and navigate policy uncertainty around infrastructure and trade,” Crawford said. “Despite these headwinds, domestic producers remain committed to competing at a high level, provided the market is governed by clear, enforceable rules. Effective trade enforcement ensures the stable foundation needed for continued investment, innovation, and leadership in the global steel market.”
Nicole Sweet, head of end-to-end recycling in North America at RHI Magnesita, added that refractories are a critical part of steel and metals production. Refractory producers are facing tariffs on finished goods and raw materials.
“At RHI Magnesita, following the recent acquisition of Resco Products, we are focusing on localizing production while developing additional solutions to revolutionize the recycling of spent refractory material in North America,” Sweet said. “These actions decrease the reliance on imports thus reducing tariff costs that would ultimately trickle down through the industry. By utilizing locally produced, recycling containing refractories, metals producers are not only shortening their supply chains and decreasing their carbon footprint, but also reducing cost by avoiding import tariffs.”
That said, tariffs are incurred on those refractory materials that cannot be sourced within North America. The tariff cost is passed on as a surcharge to metal producers, increasing their production costs.
“This negative cost impact may cause increased steel prices, which we will see in end-user applications such as vehicle manufacturing and construction,” Sweet said. “Scrap prices may also rise, impacting the margins of recyclers across the U.S. However, in the mid-to-the-long term this may largely be offset by higher volumes of local production and consumption.”
Published July 2025