Trump’s Tariffs Shake Up Global Markets: Energy, Metals, and Agriculture React
US President Donald Trump has announced a 25% tariff on steel and aluminium imports, effective March 12. The tariffs will apply to all US imports, including those from Canada and Mexico, as well as finished metal products.
Energy Market Surges: Gas Trades at Two-Year High
Gas prices in Europe have hit a two-year high, with TTF futures surpassing €58.5/MWh. This surge is driven by increased demand due to cooler weather, supply disruptions, low renewable power generation, and depleted inventories at 48.5%. Colder temperatures have led to faster inventory depletion. Similarly, US natural gas prices have risen with forecasts of cooler weather.
NYMEX is trading above $72/bbl while ICE is above $76/bbl. Drone assaults on energy facilities in Ukraine and Russia, along with supply constraints and geopolitical tensions, have pushed prices higher. Russia’s oil refinery and Ukraine’s gas and power facilities were targeted in recent attacks.
Metals React to Tariffs: Trump Implements 25% Tariffs on Steel and Aluminium
Trump’s new tariffs on steel and aluminium imports aim to boost domestic production and create jobs. However, previous tariffs did not increase production; in fact, US steel output was lower in 2024 than in 2017. The tariffs also impact goods from China and major allies like Canada, Mexico, Brazil, and the EU.
Aluminium imports from Canada and steel imports from Canada, Brazil, Mexico, and South Korea are significant for the US. Tariffs on metals could raise prices in the US, affecting the Midwest premium. However, LME prices may see minimal impact. A global trade war could slow growth and keep inflation high.
Agriculture Thrives: Coffee Hits Record Highs
Arabica coffee prices reached record highs due to tight global supplies and concerns about the next harvest season. Investors are bullish on coffee futures, with total stocks at US port warehouses near lows. Weekly export data shows rising corn and wheat inspections, while soybean inspections declined.
Overall, Trump’s tariffs on steel and aluminium, along with geopolitical tensions and supply disruptions, are reshaping global markets. Energy prices are surging, metal prices are fluctuating, and agriculture markets are responding to supply concerns. Investors should stay informed and adapt their strategies accordingly.
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