Steel, aluminium tariffs will impact millions of tonnes of imports

AluminIum and steel were among the first tariffs to be enacted during President Donald Trump’s first term. A revival of those measures is expected Saturday (Feb 1), which would affect millions of tonnes of imported metal.

The US relies on foreign supplies to meet demand for metals used in construction and to manufacture vehicles, technology and military equipment. Its closest trading partners are also among the top sources of steel and aluminium imports.

US consumption of steel totalled about 93 million tonnes in 2023, according to data from the US Geological Survey, with net imports accounting for 13 per cent of that demand. 

Last year, Canada, Brazil and Mexico were the nation’s top three sources of imported steel, according to US Commerce Department data.

The US steel industry is coming off its worst year since Trump’s first term in office. Domestic steel mills say a renewed uptick in imports is hurting profits and production.

When it comes to aluminium, a higher-value metal than steel, the US consumed about four million tonnes in 2023, with net imports accounting for 44 per cent of that total. Canada was the source of 56 per cent of aluminium imports, according to research from Morgan Stanley. 

Trump has said tariffs can help US companies ramp up domestic production. For metals, at least, building new capacity won’t come quickly, according to Morgan Stanley.

“Constructing and ramping up new smelters/mills can take three or more years,” Morgan Stanley analysts Carlos De Alba and Justin Ferrer said in a report this week. “Hence, any import tariffs applied to metals or mined products are likely to result in higher domestic prices for local buyers of these materials.”

Trump told reporters on Friday that copper tariffs will take a little bit longer to implement than those for aluminium and steel. The US is again a net importer of copper, with foreign supplies accounting for about 36 per cent of domestic refined demand in 2023, according to Morgan Stanley. More than a third of total copper imports came from Canada and Mexico. BLOOMBERG