Trump tariffs hit Arizona's biggest trading partners

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(Source: 3TV/CBS 5) (Source: 3TV/CBS 5)
Local companies that rely heavily on steel and aluminum will feel the most impact, like defense contractors Raytheon, Boeing and Honeywell, said Sapna Gupta, a senior policy analyst at the ASU Morrison Institute for Public Policy. (Source: 3TV/CBS 5) Local companies that rely heavily on steel and aluminum will feel the most impact, like defense contractors Raytheon, Boeing and Honeywell, said Sapna Gupta, a senior policy analyst at the ASU Morrison Institute for Public Policy. (Source: 3TV/CBS 5)
PHOENIX (3TV/CBS 5) -

The Trump Administration's new tariffs on steel and aluminum imports from Mexico, Canada and the European Union will affect Arizona businesses and consumers, although the impacts may be muted at first, analysts say.

The 25 percent tariffs on imported steel and 10 percent tariffs on imported aluminum took effect for those countries as the clock struck midnight eastern time, turning the calendar to June 1.

[RELATED: Trump tariffs on US allies draw retaliation threats]

Mexico and Canada are Arizona’s largest foreign trading partners, accounting for about half of what businesses in the Grand Canyon State sell abroad. Both countries quickly announced plans to impose retaliatory tariffs, which could put pressure on those exports.

Last year, Arizona companies exported more than a billion dollars in machinery and fabricated metal products to Mexico and Canada. The state exported nearly $21 billion worth of goods in all, according to the U.S. Census Bureau. 

Local companies that rely heavily on steel and aluminum will feel the most impact, like defense contractors Raytheon, Boeing and Honeywell, said Sapna Gupta, a senior policy analyst at the ASU Morrison Institute for Public Policy.

“There should not be an immediate impact on jobs; however, where I see this impacting is how companies plan their future investment,” she said.

The prospect of tariffs on foreign metals has already buoyed the price of U.S. steel. Flat-rolled steel prices are at the highest levels in a decade, according to S&P Global Platts.

However, higher metals prices, both foreign and domestic, may not affect large companies right away, Gupta said.

“Manufacturers buy steel and aluminum months ahead. They've agreed on a price and they have their supply set, so it could take a while for that impact to be felt; it could take several months or even longer,” she said. “But where you can see the impact right away is on small businesses.”

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