Singapore, Feb 11 (Reuters) - The announcement by U.S. President Donald Trump regarding a 25% tariff on steel and aluminum has caused gold prices to hit record highs due to concerns about escalating trade tensions and inflation. While some countries remained optimistic about negotiations, solid shares experienced downward pressure.
China, the largest steel producer globally, doesn't directly export much steel to the U.S. However, Trump emphasized that China's steel exports have indirectly pushed other nations to increase their exports to the U.S. He also mentioned the likelihood of transshipment or processed steel products entering the U.S. through intermediary countries.
Initially excluding no countries from the tariffs, Trump reconsidered after a discussion with Prime Minister Anthony Albanese, indicating a potential exemption for Australia due to their trade surplus with the U.S. Australia currently supplies 1% of U.S. steel imports and 2% of its aluminum imports.
South Korea's Trade Minister, Cheong In-kyo, hinted at the possibility of negotiations over the tariffs, warning about potential reduced demand for U.S. steel and declining profitability for steel exporters.
According to Do Ngoc Hung, Vietnam's trade representative to the U.S., many nations are likely to strengthen protective measures following the U.S.'s tariff announcement, potentially affecting Vietnam's steel exports. He advised Vietnamese steel producers to evaluate the situation carefully and look into boosting exports to countries with free trade agreements with Vietnam.
Gold surged to a record high as investors sought the safe-haven asset, with spot gold priced at $2,916.37 per ounce, reaching $2,942.70 earlier.
In response to the tariffs, shares in Chinese steelmakers dropped, and iron ore futures, a key component of steel production, declined as concerns over tariffs overshadowed supply disruptions in Australia.
The American Primary Aluminum Association (APAA) commended Trump for imposing the tariffs to protect the U.S. aluminum industry. APAA President Mark Duffy hailed the move as crucial for safeguarding American jobs and families.
However, U.S. companies reliant on aluminum importation urged Trump to consider the tariffs' long-term impact on the entire U.S. metals sector. Brian Hesse, CEO of New York-based PerenniAL, emphasized the necessity of thoughtful planning for increasing domestic aluminum production to avoid adverse effects on consumer prices.
Century Aluminum, a U.S.-based aluminum producer, endorsed Trump's import tariffs, emphasizing their role in enhancing national security and supporting American aluminum workers. CEO Jesse Gary affirmed that the tariffs would help balance the playing field for domestic aluminum production.