US Manufacturers Face Rising Metal Costs:

• American factories are paying 23% more for aluminum, 40% more for steel, and 10% more for copper than their European counterparts.
• The price spike comes even before tariffs take effect, as manufacturers rush to stockpile materials.

Tariffs Set to Widen the Cost Gap:

• President Donald Trump is imposing 25% tariffs on steel and 10% on aluminum starting Wednesday.
• Copper tariffs are not yet official but are under investigation, with expectations of a 25% duty in the future.
• Analysts predict these costs will be fully passed on to US buyers, making American goods less competitive globally.

Market Reactions and Supply Chain Shifts:

• Aluminum premiums in the US hit record highs, pushing domestic prices up 20% this year.
• Steel benchmark prices surged 30% in 2025, reaching over $900 per ton in February.
• Traders are rushing to ship metals into the US before tariffs hit, further distorting global markets.

Historical Perspective: Do Tariffs Work?

• A similar 25% tariff on steel and 10% on aluminum was introduced in 2018.
• Since then, US steel production has barely changed, and domestic aluminum output has declined.
• History suggests tariffs may not revive American production but will increase costs for consumers.

Global Metal Trade Already Reacting:

• Copper flows are shifting in anticipation of US tariffs.
• Comex copper prices are expected to trade at a sustained premium over global benchmarks.

What’s Next?:

• These tariffs are creating immediate cost pressures for US manufacturers, potentially eroding their global competitiveness.
• While the goal is to boost domestic production, history suggests that higher prices for raw materials mainly hurt businesses and consumers rather than revitalizing industries.
•  If past trends hold, US factories could struggle with rising costs, while international competitors gain an advantage with cheaper metals.