US President Donald Trump’s 25% tariffs on steel and aluminium imports have led to a surge in metal prices, particularly for aluminium. Industry experts warn that domestic smelters will struggle to meet the growing demand for these metals.
The US aluminium premium has jumped by 60% since Trump took office, with analysts predicting that it will take time for new plants to be built and existing ones to reopen. This means that foreign imports will continue to dominate the market, making it difficult for domestic producers to compete.
“The impact of these tariffs is being felt at every level of the supply chain,” said analyst Volkmar Baur at Commerzbank. “Aluminium capacities would have to be massively expanded in a short period of time to replace even a portion of the imports with domestic production.”
The American Primary Aluminium Association praised Trump for the tariffs, but industry experts warn that it will take longer than expected for domestic production to catch up. The US aluminium smelters produced only 670,000 metric tons of the metal last year, down from 3.7 million in 2000.
Trump’s trade actions have also sparked concerns about slower economic growth and metals demand due to a possible trade war. Industry experts warn that a similar tariff on copper could have devastating effects on the US economy.
As Trump continues to implement his trade policies, industry experts will be watching closely for signs of supply chain disruptions and price increases.
Source: https://www.reuters.com/markets/commodities/trump-metals-tariffs-propel-gold-pressure-china-steel-shares-2025-02-11