Kristina Roberts
The prices of steel and aluminum in the United States shot up suddenly, while the stock prices of companies that make these metals in other countries dropped sharply. This happened after former US President Donald Trump said he would increase taxes on imported steel and aluminum to 50%, double the previous rate. The new rules will start on June 4, 2025, and many people are worried this could make trade problems between countries even worse.
Just a few hours before announcing these new taxes, Trump had accused China of breaking an earlier agreement where both countries were supposed to reduce taxes and trade restrictions on important minerals. The US is one of the biggest buyers of steel in the world, bringing in over 26 million tons last year. Because of this, any change in taxes affects not just American businesses but also companies in other countries that sell steel and aluminum to the US.
Some experts are not sure if these new taxes will stay in place for long because Trump has changed his mind on trade rules before. But for now, the uncertainty is causing metal prices to rise, which could hurt factories and industries that rely on these materials. “Higher prices will likely make things harder for manufacturers in the US, especially since many were already expecting slower business this year,” said Eoin Dinsmore, an analyst at Goldman Sachs.
The cost of aluminum in the US went up by 54%, and the price of a type of steel called hot-rolled coil increased by 7.4%. Copper prices also rose because traders think Trump might soon announce heavy taxes on this metal, which is used in wiring, electronics, and construction. The price of copper in the US reached its highest point in almost two months, making it much more expensive than in other parts of the world.
Companies in Europe and Asia are also feeling the effects. A major German steel company, Salzgitter, said these new US taxes are causing big problems for industries in Europe. About 20% of Europe’s steel exports go to the US, so any change in trade rules can hurt business. “There’s a risk that steel meant for the US might now be sent to other markets, which could cause oversupply and lower prices in those regions,” explained Bastian Synagowitz from Deutsche Bank.
In South Korea and Vietnam, the stock prices of steel companies fell as investors worried about losing business in the US. South Korea’s government even said it would prepare financial support for local businesses affected by the new tariffs. Meanwhile, some experts believe the final tax rates might not be as high as Trump announced. “I doubt the full increase will last long, especially since trade policies often change after negotiations,” said Chelsea Ye, a senior analyst at McCloskey, a metals research firm.
The sudden jump in metal prices is causing concern for many industries, from car manufacturers to construction companies, as they now have to pay more for raw materials. If prices stay high, it could lead to more expensive products for consumers. At the same time, steel and aluminum producers in the US might benefit since foreign metals will become more expensive, making locally made metals more attractive.
As the world waits to see how these new tariffs will play out, businesses are preparing for possible changes in trade rules. Some countries may try to negotiate with the US to reduce the impact, while others might impose their own taxes on American goods in response. For now, the global trade situation remains uncertain, and companies are watching closely to see what happens next.
The effects of these tariffs could be far-reaching, influencing jobs, prices, and economic growth in many countries. While the goal may be to protect American industries, the risk of a larger trade war could end up hurting businesses and consumers worldwide. Experts will continue to monitor the situation, but for now, the sudden rise in metal prices and falling stock markets show just how quickly trade policies can shake up the global economy.
