Recently announced U.S. tariffs on steel and aluminum imports following Donald Trump's reelection as president will increase volatility in commodity markets and regional price disparities, Fitch Ratings said Wednesday.
"This may be exacerbated by the likely macro-economic consequences and demand implications for broader commodity markets from the recently proposed blanket U.S. tariffs on imports from China, Mexico and Canada, should they be implemented and remain in place," the rating agency said.
Effective from March 12, the U.S. intends to eliminate the system of exemptions and quotas on steel and aluminum imports, reinstating a full 25% tariff on steel and increasing tariffs on aluminum imports to 25% from 10%, the agency noted.
The White House also announced a 25% tariff on most imports from Mexico and Canada, 10% on Canadian energy resources, and a 10% tariff on China, which it further added.
Fitch expects the aluminum market to be the most affected, as the U.S. relies heavily on primary aluminum imports for domestic consumption.
In 2024, the U.S. produced 0.7 million tons of primary aluminum but consumed 4.7 million tons, with about 70% of imports coming from Canada, Fitch said.
The tariffs will likely increase aluminum prices in the U.S., boosting the U.S. Midwest premium, it underlined.
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