Trump metals tariffs propel gold, pressure China steel shares

Century Aluminum

11/02/2025 08:27

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      Trump imposes 25% tariffs on steel, aluminium imports
    

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      Trump agrees to consider exemption for Australia
    

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      Trump's proclamation cites Chinese global steel exports
    

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      Gold touches record $2,942.70 per ounce
    

  
    By Tony Munroe
       SINGAPORE, Feb 11 (Reuters) - U.S. President Donald
Trump's 25% tariffs on steel and aluminium sent gold to record
highs on worries of widening trade conflict and inflation, while
some countries held out hope for negotiations and Chinese steel
firm shares came under pressure.
    China, the biggest steel maker, is not a top direct exporter
of steel to the U.S. but Trump said that China's exports had
forced others to ship more to the U.S., while rising imports
"support a conclusion" of transshipment or processing of steel
products via third party countries into the U.S.
    After saying there would be no exemptions, Trump agreed to
consider one for Australia following a call with Prime Minister
Anthony Albanese, adding that Australia was "one of the few"
countries with which the United States had a trade surplus.
    Australia accounts for 1% of U.S. steel imports and 2% of
its aluminium imports, Albanese said.
    Later on Tuesday, South Korean Trade Minister Cheong In-kyo
said that Seoul will "actively consider" whether there is room
for negotiation on the tariffs, warning also of reduced U.S.
steel demand and erosion of steel exporters' profitability.
    In 2024, South Korea posted a record $55.7 billion trade
surplus with the United States, up 25.4% from a year earlier.
    Canada, Brazil, Mexico, South Korea and Vietnam are the top
shippers of steel into the U.S., according to government and
American Iron and Steel Institute data, while Canada is the
dominant supplier of imported aluminium.
    Do Ngoc Hung, Vietnam's trade envoy to the U.S., said many
countries were likely to enhance protective measures following
the U.S. move, making it harder for steel exporters such as
Vietnam.
    "Vietnamese steel makers still have a chance to continue
their shipments given that U.S. manufacturers are yet to be able
to fully meet domestic demand," he said on Tuesday.
    "Vietnamese exporters need to assess the situation
carefully, and seek to boost their exports to markets that have
free trade agreements with Vietnam," Hung added.
    Gold climbed to a record high, as investors flocked to the
safe-haven asset, with spot gold  XAU  up 0.3% at $2,916.37 per
ounce as of 0701 GMT after earlier reaching $2,942.70.
    Shares in Chinese steelmakers dipped between 0.145% and
2.62%, while futures in iron ore, the main steelmaking
ingredient, erased early gains to trade lower as tariff concerns
outweighed weather-related supply disruptions in Australia.

    PRAISE AND CONCERN
    The American Primary Aluminum Association (APAA) praised
Trump for the tariffs.
    "Today is a great day for the U.S. aluminum industry," said
Mark Duffy, president of the APAA. 
    "Unfair trade practices have devastated the domestic
aluminum industry and President Trump's actions today will
protect thousands of American workers and their families."
    But U.S. companies that use aluminum urged Trump to more
fully consider the long-term effect tariffs could have on the
entire U.S. metals industry.
    "I don’t think anyone in the U.S. is more in favour of
increasing domestic aluminum production than me, but it has to
be done thoughtfully over several years,” said Brian Hesse, CEO
of New York-based PerenniAL, which distributes slab, wire rod
and billet produced with aluminium used in products such as
wheels and window frames.
    “You can’t cut your nose off to spite your face. We can’t
produce enough aluminum in the U.S. to meet half of our demand
right now,” Hesse said, adding that price increases from tariffs
would be passed to consumers.
    Chicago-based Century Aluminum  CENX.O , which operates
several U.S. aluminium smelters, said it "strongly supports"
Trump's tariffs on imports of the metal. 
    "President Trump's decisive action will protect national
security and help level the playing field for America’s aluminum
workers," said Century CEO Jesse Gary.
    

 (Reporting by Tony Munroe in Singapore, Ernest Schneider in
Houston, Melanie Burton in Melbourne, Hyunjoo Jin in Seoul, Amy
Lv in Beijing and Francesco Guarascio in Hanoi; Editing by Kate
Mayberry)
 ((tony.munroe@thomsonreuters.com))