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Few Worries Among Analysts Over Steel, Aluminum Tariffs

Our analysts don't see a big impact on industrial firms from the tariff threat.

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Jeremy Glaser: The announcement of steel and aluminum tariffs has sent the market lower in recent days as investors have worried about the impact of higher input prices. We talked to several of our industrial analysts to see what the real impact would be on many of the firms they cover, from aerospace to automobiles.   

Chis Higgins: We don't expect a significant cost impact on the aerospace and defense industry from the recently announced tariffs on aluminum and steel that the Trump administration has unveiled. It you look at the weight of an aircraft, about 80% of it is aluminum, but that's only for older generation aircraft. For newer generation aircraft, it's closer to 20%. Overall, the cost of aluminum in the aircraft is no more than about 2 or 3%, and the industry has shown an ability to absorb aluminum price increases in the past. 

Brian Bernard has a position in the following securities mentioned above: GM. Find out about Morningstar’s editorial policies.

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