Aluminum and Steel Tariffs Set to Return
AluminIum and steel were among the first tariffs to be enacted during President Donald Trump’s first term. A revival of those measures is expected Saturday (Feb 1), which would affect millions of tonnes of imported metal.
US Metal Consumption
The US relies on foreign supplies to meet demand for metals used in construction and to manufacture vehicles, technology and military equipment. Its closest trading partners are also among the top sources of steel and aluminium imports.
US consumption of steel totalled about 93 million tonnes in 2023, according to data from the US Geological Survey, with net imports accounting for 13 per cent of that demand.
Last year, Canada, Brazil and Mexico were the nation’s top three sources of imported steel, according to US Commerce Department data.
Impact on the Steel Industry
The US steel industry is coming off its worst year since Trump’s first term in office. Domestic steel mills say a renewed uptick in imports is hurting profits and production.
Aluminum Consumption
When it comes to aluminium, a higher-value metal than steel, the US consumed about four million tonnes in 2023, with net imports accounting for 44 per cent of that total. Canada was the source of 56 per cent of aluminium imports, according to research from Morgan Stanley.
Tariffs and Domestic Production
Trump has said tariffs can help US companies ramp up domestic production. For metals, at least, building new capacity won’t come quickly, according to Morgan Stanley.
“Constructing and ramping up new smelters/mills can take three or more years,” Morgan Stanley analysts Carlos De Alba and Justin Ferrer said in a report this week. “Hence, any import tariffs applied to metals or mined products are likely to result in higher domestic prices for local buyers of these materials.”
Copper Tariffs
Trump told reporters on Friday that copper tariffs will take a little bit longer to implement than those for aluminium and steel. The US is again a net importer of copper, with foreign supplies accounting for about 36 per cent of domestic refined demand in 2023, according to Morgan Stanley. More than a third of total copper imports came from Canada and Mexico.
Conclusion
The revival of tariffs on aluminum and steel is expected to affect millions of tonnes of imported metal, with the US relying on foreign supplies to meet demand for metals used in construction and manufacturing. The US steel industry is coming off its worst year since Trump’s first term in office, and domestic steel mills say a renewed uptick in imports is hurting profits and production.
FAQs
Q: What is the expected impact of the tariffs on the US steel industry?
A: The tariffs are expected to hurt profits and production in the US steel industry, which is already coming off its worst year since Trump’s first term in office.
Q: What is the current state of the US aluminum industry?
A: The US aluminum industry is also struggling, with net imports accounting for 44 per cent of total consumption in 2023.
Q: What is the timeline for implementing copper tariffs?
A: Trump has said that copper tariffs will take a little bit longer to implement than those for aluminum and steel.
Q: What is the current state of US copper imports?
A: The US is a net importer of copper, with foreign supplies accounting for about 36 per cent of domestic refined demand in 2023, according to Morgan Stanley.
