Analysis
December 4, 2025
Final Thoughts
Written by Michael Cowden
It’s not quite time to roll out the year-in-review articles. But when it is, there’s little doubt that we’ll be writing a lot about President Donald Trump and his tariffs – whether we’re talking reciprocal tariffs, Section 232s, or any number of increasingly exotic sections. (Section 122, anyone?)
Trump isn’t a king, except when it comes to tariffs. Because, for better or worse, Congress and the Supreme Court have granted US presidents king-like powers. And as I’ve noted before, and especially with Trump, big changes to US tariff policy can come at the speed of social media. There is little or no regard for ships on the water.
But it’s important to keep in mind – maybe especially for those of us in the US – that the rest of the world can act too. And I think we’re already seeing signs of that action. Or at least that’s been my takeaway from some of SMU’s recent reporting and from Community Chat webinars for both SMU and AMU.
Take the AMU Community Chat we did on Thursday with Massimo Grifone, a commercial director with Cauvin Metals, an aluminum trader based in Italy. Grifone started the Chat by highlighting how Europe could find itself short of metal. Why? High energy prices have limited domestic production. Also, quotas on Russian aluminum, imposed following the full-scale war in Ukraine, have choked off a major source of foreign supply. (Editor’s note: It was a good chat. The recording, which I encourage you to listen to, is here.)
Meanwhile, production disruptions in Iceland and a potential disruption in Mozambique – two important sources of foreign metal to the EU – could further curb import supplies. Factor in the EU’s Carbon Border Adjustment Mechanism (CBAM), and import supplies to the EU could be reduced further still.
Can anyone think of a country with a lot of aluminum production, one that also sports a low carbon footprint? If you said “Canada!”, you win! Sure, there are some hurdles to overcome. Canadian producers make aluminum sows, which are preferred by US customers, rather than the aluminum ingots European buyers prefer.
But that’s not an insurmountable obstacle. And the motivation to overcome obstacles is there in spades. You can thank the 50% Section 232 tariff Canadian metal faces in the US for that. So, it probably just makes good business sense for Canada to ship more metal to the EU. Doing so might also keep the Midwest premium high, which could serve Canada’s interests by putting pressure on the US to reduce Section 232.
Maybe we’re seeing something similar when it comes to the pig iron trade with Brazil, which has been the go-to source for US EAFs since Russia’s full-scale invasion of Ukraine in 2022. But European steel mills, as we’ve reported late last month, have purchased significant volumes of Brazilian pig iron.
That only makes sense. The EU has been scaling back Russian pig iron via quotas. And the quota will turn into a ban in 2026. Also, as Daniel Liss noted on another very good SMU Community Chat on Wednesday (the recording is here), even if the war in Ukraine were to magically end, do you really want a supply chain now that relies on Russia?
Also, the US has probably provided Brazilian suppliers with more than a little incentive to look to other markets. Remember last summer, when it looked like the US might tag all Brazilian exports, including pig iron, with tariffs of 50%?
Of course – and as Daniel Liss and NEMO Industries are banking on – one way to get around trade policy uncertainty is to build locally. Liss and NEMO plan to do just that with a proposed $3 billion pig iron plant in Louisiana. It sounds like a cool project, and we wish them luck!
By the way, one of the best parts of the Chat with Daniel was his account of working with actress Sofía Vergara in his pre-metals career. He noted the Modern Family star achieved success only after decades of hard work and hustle. And we might all need more hustle in the New Year as we seek to keep on top of trade developments not only in the US but abroad as well.
Or maybe there is another way. Massimo had another suggestion: Consider hiring an expert on geopolitics. Note to any political science PhDs out there struggling for a tenure-track position… steel and metals might offer you greener pastures!
Get out of the cold with SMU!
I know it’s only early December. And I so I shouldn’t be complaining about the cold yet. But, I’ll tell you, I don’t love waking up to single-digit temperatures – which is what I’ve been doing in Chicago lately.
Want to find a work-sanctioned reason to get out of the cold? SMU has plans for you!
For starters, our next Steel 101 will be on Jan. 13-14 in Ontario, Calif., and will feature a tour of Nucor-CSI. We haven’t done a Steel 101 on the West Coast in quite a few years. And we’re happy to offer a 101 that’s convenient for our fans there. We’re also happy to welcome any Northerners looking for an escape to Southern California. (Maybe you can tack on a visit to LA or Palm Springs afterward.) You can learn more and register here.
Also, don’t forget to register for the Tampa Steel Conference. It’s Weds-Fri, Feb. 11-13, this year. Nearly 250 people from more than 100 companies have already registered to attend. You can find out more about the event here. You can register to attend here. (I hate to say it. But don’t wait too long. Hotels are going fast.)
