Global Aluminum Market Poised for Upheaval as Trump Reinstates Tariffs
The aluminum industry is poised for disruption as global traders assess the impact of President Donald Trump's renewed protectionism. The US leader has imposed tariffs of 25% on all aluminum imports, escalating trade tensions he initiated during his first presidency.
Market Implications
Analysts anticipate higher prices for US manufacturers due to increased regional premiums. Canadian supply is expected to shift to Europe, while the US will likely boost imports from the Middle East. These tariffs come amidst global market volatility caused by international sanctions and energy market disruptions following Russia's invasion of Ukraine.
Trump's Reset Agenda
Trump has expanded tariffs introduced in 2018, removing exemptions for major suppliers like Canada and the EU. Speculation suggests potential exclusions as Trump leverages these measures to reset US trade relations. However, analysts predict that most tariffs will be passed on to US consumers.
Muted Market Reaction
Despite Trump's threat of even higher tariffs, the London Metal Exchange (LME) has seen a muted price reaction. Aluminum prices have remained stable, while iron ore futures have declined slightly.
Impact on Aluminum
Trump's tariffs are likely to have a greater impact on aluminum than steel, given the US's heavy reliance on the base metal and the higher tariff rates. US aluminum buyers are expected to bear the cost increase due to resilient demand and limited domestic supply.