Trump's tariffs to increase volatility in commodity markets: Fitch

By Gokhan Ergocun

ISTANBUL (AA) - New US tariffs on steel and aluminum imports following Donald Trump's re-election as president will increase volatility in commodity markets and regional price disparities, US-based rating agency Fitch said Wednesday.

"This may be exacerbated by the likely macro-economic consequences and demand implications for broader commodity markets from the recently proposed blanket US tariffs on imports from China, Mexico and Canada, should they be implemented and remain in place," it said.

The US 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%, which will take effect on March 12, 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, it added.

Fitch expects the aluminum market to be the most affected, as the US relies heavily on imports of primary aluminum for domestic consumption.

In 2024, the US 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 US, boosting the US Midwest premium, it underlined.

Canada may boost aluminum exports to Europe to offset US policies, but there will be no significant impact on global supply and demand, Fitch added.