In July, the US concluded tariff agreements with Japan and Indonesia, and it was also announced that a deal had been reached with Vietnam. Although more lenient rates were established for a wide range of industrial and consumer goods, tariffs on steel and aluminum remain at 50% and were not part of the negotiations.
In the steel market, this translates into continued price pressure on imported rolled steel, pipes and flat products from Japan and Vietnam. Their exclusion from the list of preferential partners strengthens the position of American producers but, at the same time, leads to increased costs for steel consumers in the automotive, pipe and construction industries. This is particularly significant against the backdrop of rising iron ore and scrap prices in July, which are already driving up the cost of domestic production.
A similar situation applies to aluminum. Indonesia remains one of the key suppliers of foil and aluminum cans to the United States. Demand from the packaging and construction sectors remains stable, but the possibility of reducing costs for processors remains blocked.
As for base metals, the impact of the deals has been mixed. Indonesia has lifted export restrictions on copper and nickel, creating conditions for growth in global supply. However, tariffs on imports of these metals into the US have risen to 19%. This limits US processors’ access to alternative sources without losing margin. Nickel was also excluded from tariff exemptions, despite Indonesia being the largest producer. In the tin segment, where Indonesia and Vietnam play a prominent role, tariffs in the US will be 19% and 20% for other goods, respectively, in accordance with the agreements.
Thus, the July deals establish a new framework for cooperation, but do not ease the situation for the American metallurgical industry and processors. For steel and aluminum, the maintenance of high tariffs increases domestic price pressure and limits import competition. There is no direct access to cheaper raw materials for base metals, despite the potential from Indonesia. As long as the current trade framework remains in place, the US metals sector will continue to operate under structurally high costs, a heavy reliance on the domestic market, and limited access to alternative suppliers.
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Image source: Adobe
Written by Artem Segen
