Trump to double tariffs on Steel and Aluminium - ING

Trump said he would increase tariffs on Steel and Aluminium to 50% from 25%, effective 4 June. He made the announcement as he visited a US Steel Corp. plant on Friday. Later on, Trump said he would raise Aluminium rates in a Truth Social post, ING's commodity experts Ewa Manthey and Warren Patterson note.

Trump says the tariffs are aimed at bolstering domestic production

"The US imports significant volumes of Aluminium and Steel from Canada. It imports roughly half of its Aluminium needs from abroad, with Canada the biggest supplier, accounting for 58% of imports, followed by 6% from the United Arab Emirates, US government figures show. The US also relies on Mexico and Canada for around 90% of its Aluminium scrap imports. Around 23% of Steel imports into the US arrive from Canada, followed by Brazil at 16%, Mexico at 12% and South Korea at 10%."

"Trump said the tariffs are aimed at bolstering domestic production and bringing jobs back to the US. However, in 2024, the output of the US Steel industry was 1% lower than in 2017, before the introduction of the first round of Trump tariffs; the Aluminium industry produced almost 10% less. For Aluminium, rising energy costs have played a major role in the decline of the US smelting industry over the years. Canada's Aluminium industry, on the other hand, benefits from cheap hydropower to power its smelters."

"Emirates Global Aluminium's planned Aluminium smelter in the US, announced last month, could help reduce the US's reliance on imported Aluminium and increase domestic Aluminium production. The plant will be the first new primary Aluminium smelter built in the US in over 40 years. It's expected to have a 600,000 metric tonnes per year capacity, nearly doubling US primary Aluminium output. Construction is expected to start by late 2026 and be completed by the end of the decade, with first production anticipated by 2030. Its final go-ahead is contingent on securing a long-term power supply."