Bloomberg reports that sources familiar with the matter have confirmed that Cleveland-Cliffs, America’s biggest automotive steel supplier, has signed a 3-year, fixed-price contract with multiple U.S.-based automakers, including GM. This is an unusually long term for such a contract, which typically lasts one year.

The 3-year contract represents a hedge for both the supplier and the automakers. Cleveland-Cliffs is capitalizing on the Trump administration’s steel tariffs, making domestic steel more desirable, and the automakers are hedging against potential inflation by locking in a fixed price for three years.

President Donald Trump imposed a 25 percent tariff on imported steel in March and increased it to 50 percent in June. The intention is to bolster domestic steel production, incentivize companies like automakers to use American steel, and increase federal revenues. However, some economists argue that tariffs slow economic growth and raise prices for consumers.

Many expected Trump’s tariffs to dramatically increase car prices, but those fears haven’t materialized beyond small increases typical of regular inflation with model year changeovers. As 2026-model-year vehicles start to come out in the second half of 2025, most price increases have been modest for both domestically and internationally produced vehicles. This new deal with Cleveland-Cliffs and U.S. automakers could help ensure continued stability for new car prices over the next three years.

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