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Iowa Manufacturers Face Steel Prices Near $1,400/Ton as Tariffs Drive Up Costs
Iowa manufacturers are facing some of the highest domestic steel prices in four years, with U.S. hot-rolled coil approaching $1,400 per ton. Elevated tariffs and tight domestic supply are increasing costs for steel-consuming businesses, according to an Iowa State University economist.
Key Points
- U.S. steel prices: Hot-rolled coil is approaching $1,400 per ton, according to Iowa State University economist Peter Orazem.
- Price comparison: U.S. steel is reportedly priced at roughly three times Chinese levels and about 67% above European prices.
- Domestic inflation: U.S. steel prices have increased approximately 34% since February 2025, compared with about 1% in Canada, according to Orazem.
- Trade policy: Section 232 tariffs of 50% continue to apply to covered imported steel, subject to applicable exceptions.
- Manufacturing impact: Deere previously forecast approximately $900 million in net tariff costs for fiscal 2026.
MONTREAL (Scrap Monster): Iowa manufacturers are facing mounting steel costs as domestic hot-rolled coil prices approach $1,400 per ton, reflecting the combined pressure of elevated import tariffs and limited domestic supply.
Peter Orazem, interim chair of economics at Iowa State University, told Radio Iowa that U.S.-produced hot-rolled coil is trading at approximately three times the price of comparable steel in China and roughly two-thirds higher than European prices.
According to Orazem, U.S. steel prices have increased approximately 34% since February 2025, compared with an increase of about 1% in Canada over the same period.
ScrapMonster Edge: Higher Steel Prices Affect Producers and Buyers Differently
Steel tariffs can strengthen the competitive position of domestic mills by increasing the cost of imported material. However, manufacturers that purchase steel as a production input face a different cost equation.
For equipment manufacturers, fabricators and other steel-consuming industries, higher domestic coil prices can increase production expenses even when the steel itself is purchased from U.S. mills.
Deere's earlier forecast of approximately $900 million in net tariff costs illustrates the broader financial exposure faced by major equipment manufacturers. That figure covers Deere's tariff exposure across its operations and should not be interpreted as a steel-only expense.
Industry takeaway: Higher domestic steel prices can benefit steelmakers while increasing costs for downstream manufacturers. For scrap processors, the relevant signals to monitor are mill production, purchasing activity and scrap buying prices, rather than assuming higher finished-steel prices automatically translate into stronger scrap demand.
U.S. Steel Prices Rise Faster Than International Benchmarks
Orazem said the price of steel used in U.S. manufacturing has increased considerably faster than comparable prices in Canada, China and Europe.
The widening gap creates additional cost pressure for American businesses that rely heavily on hot-rolled steel, including agricultural equipment manufacturers and industrial fabricators.
His comparison reflects reported market price levels rather than a fully landed import-cost calculation, which would also include tariffs, transportation and other expenses.
Steel Tariffs Remain in Effect Following Supreme Court Ruling
The U.S. Supreme Court invalidated tariffs imposed under the International Emergency Economic Powers Act earlier in 2026, but separate national-security tariffs under Section 232 remained in place.
Covered imported steel products continue to face duties of up to 50%, although rates and exemptions vary by product classification and origin.
The continued restrictions are intended to support domestic steel production, while manufacturers purchasing steel face higher costs when domestic supply is constrained.
Deere Previously Forecast $900 Million in Net Tariff Costs
Deere & Company, one of Iowa's largest manufacturing employers, previously estimated approximately $900 million in net tariff costs for its fiscal year ending November 1, 2026.
During its May earnings call, the company explained that the estimate reflected roughly $1.2 billion in direct annual tariff exposure, partly offset by approximately $272 million in tariff refunds.
The company's outlook underscores the financial challenges facing major U.S. equipment manufacturers as they manage trade restrictions, elevated material costs and purchasing decisions.
Courtesy: Radio Iowa.
