Donald Trump has announced he will soon impose new 25% tariffs on all steel and aluminium imports into the US.
Trump, speaking to reporters on Air Force One on his way to the NFL Super Bowl in New Orleans on Sunday, said he would announce the new metals tariffs on Monday.
He also said he would announce reciprocal tariffs on Tuesday or Wednesday, to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each country.
“And very simply, it’s, if they charge us, we charge them,” Trump said of the reciprocal tariff plan.The largest sources of US steel imports are Canada, Brazil and Mexico, followed by South Korea and Vietnam, according to government and American Iron and Steel Institute data.
Vasu Menon, managing director of investment strategy at OCBC in Singapore said it was unclear whether Trump’s latest announcement was a negotiation strategy.
“After all if implemented it will also hurt the U.S. given its dependence on imported steel and aluminum from Canada and Mexico which are major suppliers of these metals to the US,” Menon said.
“Markets will be on edge and volatile with the escalating trade war and investors need to tread with caution for now and brace for possibly more market turbulence.”
Trump’s comments came as China’s retaliatory tariffs, announced last week, came into effect. The measures target $14bn worth of products with a 15% tariff on coal and LNG, and 10% on crude oil, farm equipment and some vehicles.
The gold price has hit a record high, as investors scramble for a safe haven for their money.
The spot price of gold has risen by 1% in early trading to $2,892 per ounce, above the previous record high set last Friday.
Gold has been rising in recent weeks, amid concerns over the impact of Donald Trump’s policies. It has gained 10% since the start of the year, having ended 2024 at $2,623 per ounce.
This move comes as tariff threats dominate the markets again, says Kathleen Brooks, research director at XTB, Brooks believes Trump’s plan for new levies on steel and aluminium could push gold higher: "Interestingly, Trump announced his latest tariffs late on Sunday, which suggests that he is not too worried about the market reaction. Typically, Trump has announced tariffs earlier in the weekend, as if he was watching the reaction and to give himself time to back track before stocks or risk assets sold off too sharply. This may suggest that Trump is determined to impose tariffs on these industrial metals.
"These tariffs are targeting specific products, rather than individual countries, which makes it hard for any negotiations to take place. We think that this move could boost the gold price, as it may lead to a further flurry of demand to bring gold on shore to the US, in case Trump imposes tariffs on precious metals.
"The question for investors is whether gold will reach the psychologically significant $3,000 level on the back of ever-growing tariff levies. So far, the gold price is higher by $25 early on Monday."
Aluminium prices are rising, as traders worry about the imposition of new 25% tariffs on imports into the US.
The three-month aluminium contract on the London Metal Exchange (LME) has risen 0.3% to $2,635 (£2,122) a metric ton.
The aluminium contract on the Shanghai Futures Exchange was 0.2% higher at 20,530 yuan (£2,264) a ton.
The market may worry that new trade barriers leads to supply problems, or hits economic growth – meaning less demand for metal.
Kyle Rodda, a senior financial markets analyst at Capital.com, explains: “At the moment we are seeing signs that maybe this could put some upward pressure in the short term on prices just because of the supply element. One of the impacts of these tariffs is depressed global economic activity.”
The agenda
• All day: France will host the Artificial Intelligence (AI) Action Summit, gathering at the Grand Palais
• 9.30am ONS stats on UK public service productivity
• 2pm: Christine Lagarde speaking in European parliament plenary debate on ECB annual report 2023
We'll be tracking all the main events throughout the day … |
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