AMU: Markets are moving – but big tariff questions hang in the air

Late Friday, President Trump said he would double down on tariffs, raising duties on imported steel and aluminum from 25% to 50%. The justification is the same as before — national security — but this time the language is sharper and the targets wider.

That’s not all. The European Union criticized the tariff hike and said the trading bloc would consider countermeasures. And to top it off, China claims the US undermined a recently negotiated truce unrelated to Section 232, which spurred declines in the equity markets.

Midwest premiums spiked more than 50% since Friday. It is a clear sign that risk has re-entered the conversation, and buyers are already having to adjust. Again.

So what is actually on the table?

In regard to the Section 232 tariff hike, a full list is not out yet. But based on the messaging, it appears to target the same raw aluminum and semi-finished products already covered under Section 232 with a broad tariff rate hike. That is a big problem for downstream players in the US, most of whom rely on imported inputs like billet, slab, coil, and maybe even finished sheet to keep rolling lines moving and extrusion presses fed.

Despite the comments from leading representatives, no definitive retaliatory steps have been taken yet, but financial markets appear to be pricing in a yet another setback in negotiations.

For now, recycled metal appears untouched. But we have been here before. Primary prices shape the entire ecosystem. If the cost of remelt rises or if traders start hoarding units on tariff rumors, it will not take long before secondary flows feel it too.

What this means for downstream buyers

This is not just a smelter story. In fact, most smelters are still running below full capacity in the US. It is the downstream segment — rollers, extruders, fabricators — that deliver aluminum products to automakers, construction firms, appliance makers, and packaging giants.

If tariffs rise and primary prices spike, US converters will either have to raise their prices or cut into already thin margins. That affects contracts, delivery schedules, and investment plans. OEMs may push back. Imported finished goods could start to look cheaper by comparison. And the idea of reshoring becomes a lot more complicated if raw materials are overpriced and inconsistent.

A few open questions

· Will this really help US producers, or just make domestic supply tighter and more expensive?

· Will there be waivers, exemptions, or just long lines at Customs again?

· Could this derail recycled content initiatives by forcing buyers to scramble for alternative inputs?

· What are the odds this creates a trade spat with allies who are key to the US aluminum supply chain?

Bottom line

Even if this is just policy posturing or another round of brinkmanship, the market is already moving. Prices are up. Buyers are jittery. And once again, downstream players are caught in the middle. Whether or not the tariffs happen, this opens a new chapter in the trade fight and one the aluminum industry cannot afford to ignore.

There is still time for this to shift. But one thing’s clear, trade tension is back! The question now is who pays for it.

Editor’s note

Are you looking for the latest aluminum market intelligence? You can register for AMU by reaching out to AMU Senior Editor Gabriella Vagnini at gabriella.vagnini@crugroup.com.