Trump's tariffs on steel and aluminium to hike US prices
The decision by the President of the United States, Donald Trump, to impose tariffs on steel and aluminium will lead to an increase in the prices of these raw materials in the USA, according to Goldman Sachs, one of the largest investment banks in the world. The tax will apply to imports of these materials from the European Union, among others.
On Monday, U.S. President Donald Trump signed a memorandum that will impose a 25% tariff on the import of steel and aluminium. This document reinstates the rates from 2018 and raises the aluminium rate from 10% to 25%. This decision will affect Canada, Mexico, Brazil, the European Union, Japan, and the United Kingdom, among others.
Goldman Sachs predicts that the new tariffs will significantly impact steel prices in the United States. "Goldman Sachs Group Inc. said Trump's plan to impose 25% tariffs on steel and aluminum imports will largely be passed through to US prices, if no major trading partners are exempted," reports Bloomberg.
It was noted that the United States imports 85% of its primary aluminium, mainly from Canada. Besides Canada, Mexico is a key export market for steel produced in the USA, which makes the net trade between these countries and the USA close to zero, Goldman Sachs emphasises.
The future of tariffs on other raw materials
The investment bank points out the possibility of imposing tariffs on other raw materials, such as copper.
Markets are pricing in over a 90% probability of a 10% import tariff on copper by March 2025, the bank informs. The baseline forecast includes a 70% probability of such a tariff by the end of 2025.
The new tariffs on steel and aluminium will take effect on 12th March. President Trump also announced further tariffs aimed at equalising the rate of fees imposed on products from the USA by other countries. There are also plans for taxes on imported semiconductors, pharmaceuticals, and automobiles.
