By Eric Onstad, Hyunjoo Jin and Hongmei Li
LONDON/SEOUL/SINGAPORE (Reuters) -U.S. prices of steel and aluminium spiked on Monday while shares of foreign steelmakers slumped after U.S. President Donald Trump said he would double tariffs on imports of the two metals to 50%.
Trump announced on Friday the new steel and aluminium levies, which take effect on June 4, intensifying a global trade war just hours after he accused China of violating an agreement with the U.S. to mutually roll back tariffs and trade restrictions for critical minerals.
The U.S. is the world’s largest steel importer, excluding the European Union, with a total of 26.2 million tons of steel imported in 2024, according to the Department of Commerce.
While some industry experts questioned whether the tariffs would be implemented as stated, in light of Trump’s previous reversals, they said uncertainty and climbing prices of the metals would dampen industrial activity.
“Higher prices are also likely to weigh further on U.S. steel demand from the manufacturing sector, which we already expect to contract this year,” said analyst Eoin Dinsmore at Goldman Sachs.
The premium for consumers buying aluminium on the physical market in the United States < AUPc1> jumped 54%, while U.S. hot rolled coil steel climbed 7.4%.
Copper prices also surged as traders bet that Trump would impose hefty duties on the metal used in power and construction. U.S copper touched a near two-month peak, widening its premium over benchmark London prices.
Germany’s second-biggest steelmaker Salzgitter warned that Washington’s tariff policy was dealing a severe blow to European industry.
The U.S. accounted for around a fifth of European steel exports outside of the EU, according to Germany’s steel association.
“The risk for the European market, as well as other regional markets, is that some of the trade flow could reroute,” said Bastian Synagowitz at Deutsche Bank.
Analysts were sceptical whether the full force of the tariffs as announced on Friday would come into play.
“I think the final result will be far lower than initially projected, especially concerning its duration,” said Chelsea Ye, senior analyst at metals research firm McCloskey.
Meanwhile, the tariff shift was applauded by U.S. producers of aluminium, used in transport, packaging and construction, who said the move would stop a “flood” of imports.
“For decades, subsidized foreign producers have hollowed out domestic aluminum manufacturing,” said Mark Duffy, president of the American Primary Aluminum Association.