Now that the Trump administration has officially signed off on tariffs for steel and aluminum imports, manufacturers and fabricators will have to think a bit longer and harder about who they will use as suppliers. For those of us in the composites industry, there is a temptation to believe that the new tariffs will be a boon for us. But is that reality? Will the tariffs positively impact the composites market to a large enough degree that we notice a difference?
Answers depend largely on who you believe. On the one hand, there are some economists convinced that the price difference between composite materials and aluminum and steel is still so great that the tariffs will have only a minimal impact, if any impact at all. On the other hand, other economists say that the tariffs will be positive for the composites market in the long run.
Whether you sell carbon fiber tubing or buy prepregs for manual layouts, you would be wise to pay attention to what the tariffs produce over the next 6 to 12 months. According to Salt Lake City-based Rock West Composites, the results will give you a good indication of how the composites industry will be affected in the long term.
Composites in the Auto Industry
One of the first places we look when trying to determine the future state of the composites industry is its relationship with auto makers. The auto industry seems to be the holy grail of composites given the amount of money to be made. But as we all know production costs are the biggest hindrance to carmakers adopting more carbon fiber parts. Steel and aluminum tariffs are not likely to change that in the short term.
The administration’s tariffs on steel and aluminum are not designed to promote composites. Rather, they are intended to level the playing field between overseas steel and aluminum producers and their American counterparts. The tariffs will not be sizable enough to significantly decrease the gap between metals and composites.
Another thing to consider is that the Trump administration has already issued exemptions to a number of countries including Canada and Mexico. Less expensive steel aluminum coming from those two countries will continue to make its way to U.S. manufacturing plants. As for cheap steel from China, experts expect it to be funneled through exempted countries. That would make it a bit more expensive, but not so expensive as to price it out of the market.
Composites in the Aerospace Industry
We also tend to look at the aerospace industry when examining the health of the composites market. This is for good reason. Aerospace companies like Boeing, for example, are already heavily dependent on composite materials. In fact, modern planes like the Boeing 787 are already mostly composites anyway. It will not matter to aerospace manufacturers what happens to steel and aluminum.
New tariffs on steel and aluminum will have little impact on the aerospace industries use of composites. If aerospace companies increase composite use, it will be because things like carbon fiber and fiberglass make their products better. They have already showed they can get by without steel and aluminum.
Composite Materials Elsewhere
It is possible that the new tariffs could affect adoption of composites in industries other than automotive and aerospace. Construction, infrastructure, and telecom are three examples. But if the tariffs do impact these other industries, those impacts will not be felt at least for a couple of years. It is going to take a while for the tariffs to significantly alter the landscape for imported steel and aluminum.