S&P Global — 20 February 2025
Daily Update: February 20, 2025
Threatened Steel and Aluminum Tariffs Resetting Trade Expectations
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
US President Donald Trump recently announced plans for 25% tariffs on all US imports of steel and aluminum, which accounted for an estimated $61 billion, or 1.8%, of total US imports in 2024. These tariffs would apply to trading partners that have been exempted from similar tariffs in the past.
If the tariffs are being weighed strategically, they should have little impact on the average US consumer. Although the new tariffs represent an estimated $11.2 billion tax increase on American importers of these metals, it only translates into a 0.037% increase in the personal consumption expenditures price index. However, this assumes no countermeasures from trading partners. Similar tariffs in 2018 led to countermeasures from Canada, China, the EU and Mexico, targeting agribusiness interests in the US. In some industries in which steel and aluminum constitute a significant percentage of input costs, such as the transportation, construction, and packaging industries, the price impact from tariffs could be much higher, and these higher costs would be passed on to US consumers.
Brazil is a major exporter of steel to the US. The US imported 7.03 million metric tons of Brazilian steel products in 2023, worth $5.42 billion, or 55.2% of Brazil's total steel export revenues that year. The Brazilian steel industry and trade officials have adopted a cautious yet optimistic outlook that they can negotiate the proposed tariffs. Japan, South Korea and Vietnam are key steel exporters to the US, while Australia exports about 10% of its 1.5-MMt aluminum production to the US each year. China exported 259,412 metric tons of aluminum products to the US in 2024, accounting for 4.1% of its total aluminum products exports. All four Asia-Pacific countries have begun preparing for negotiations with the Trump administration, as well as countermeasures in case negotiation fails. Europe, the UK and Canada would also be impacted by the proposed steel and aluminum tariffs. Canadian aluminum makes up about 64% of US demand.
S&P Global Commodity Insights suggests that greater transparency in the US aluminum market could aid price discovery in this era of tariffs, market uncertainty, stubborn inflation and geopolitics. Platts US Midwest Aluminum Market on Close (MOC) assessment process has made significant progress in achieving transparency around named bids, offers or transactions in the aluminum market. But the new tariffs create an environment of uncertainty and nervousness for steel and aluminum markets.
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—Listen and subscribe to the podcast from S&P Global Sustainable1
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—Read the article from S&P Global Market Intelligence
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—Read the article from S&P Global Market Intelligence
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—Read the article from S&P Global Commodity Insights
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—Listen and subscribe to the podcast from S&P Global
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—Read the article from S&P Global Market Intelligence
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