U.S. President Donald Trump’s 25% tariffs on steel and aluminium pushed gold prices to record highs amid concerns over escalating trade conflicts and inflationary pressures. While some countries held out hope for potential negotiations, Chinese steel firm shares saw pressure as the market reacted to Trump’s moves.
Although China is not a top direct exporter of steel to the U.S., Trump argued that China’s exports have indirectly influenced others to increase shipments to the U.S. He suggested that rising imports support the conclusion of transshipment or processing of steel products via third-party countries before entering the U.S. market.
Initially stating that there would be no exemptions to the tariffs, Trump later agreed to consider an exemption for Australia, following a conversation with Prime Minister Anthony Albanese. Australia accounts for a small portion of U.S. steel and aluminium imports, yet is seen as one of the few countries with which the U.S. has a trade surplus.
South Korean Trade Minister Cheong In-kyo later expressed that South Korea would “actively consider” potential negotiations, although he cautioned that the tariffs could erode steel exporters’ profitability and reduce U.S. steel demand. Despite this, South Korea reported a record $55.7 billion trade surplus with the U.S. in 2024.
Countries like Canada, Brazil, Mexico, South Korea, and Vietnam are among the top exporters of steel to the U.S., with Canada being the primary supplier of aluminium. Vietnam’s trade envoy to the U.S. suggested that steel exporters, such as those from Vietnam, would need to adjust their strategies, potentially enhancing protective measures to maintain access to the U.S. market.
As the tariffs fuelled concerns, gold prices surged to an all-time high. Investors flocked to the precious metal as a safe-haven asset, with spot gold reaching $2,916.37 per ounce after peaking at $2,942.70 earlier in the session.
Shares of Chinese steelmakers fell by up to 2.6%, while iron ore futures lost earlier gains as the market focused more on tariff-related risks than supply disruptions in Australia.
The American Primary Aluminium Association (APAA) praised Trump’s tariffs, claiming that they would protect U.S. workers from “unfair trade practices.” However, U.S. companies that rely on aluminium imports expressed concerns over the long-term impact of the tariffs on the broader U.S. metals industry, suggesting that the increased costs would ultimately be passed on to consumers.
Some U.S. manufacturers, including Century Aluminium, voiced strong support for the tariffs, seeing them as a means to protect national security and create a fairer playing field for U.S. workers in the aluminium sector. However, there remains caution about the broader implications for U.S. businesses and consumers reliant on these materials.
