The United States has announced the imposition of a 25% tariff! What impact will it have on China's steel and aluminum exports?

On February 10 local time, former US President Donald Trump signed an executive order announcing the imposition of a 25% tariff on all steel and aluminum imported into the United States. Trump said on the same day that there would be "no exceptions or exemptions" for the relevant requirements. Terminal Block Connectors, Frc Connector and Rectangular Reflectors may effect.

During his first term, Trump imposed a 25% tariff on steel imported into the United States and a 10% tariff on aluminum imported into the United States. Later, trade partners such as Canada, Mexico, the European Union and the United Kingdom were granted duty-free quotas.

Industry insiders said that this time the United States generally raised tariffs on products from various countries, and it is not directly aimed at a single country. More likely, it is using tariffs to boost its domestic industries. So, how much impact will this have on China's steel and aluminum exports to the United States?

The direct export of aluminum products accounts for a relatively small proportion, and raising tariffs may increase the burden on American consumers.

Regarding the tariff increase on aluminum products by the United States, Wen Xianjun, the former vice president of the China Nonferrous Metals Industry Association and the honorary president of the Shandong Aluminum Industry Association, said: "China's current exports of aluminum products to the United States already have a very high comprehensive tax rate due to 'anti-dumping and countervailing duties', and the exports of aluminum products to the United States are very small. The main affected items are aluminum products. The United States levies taxes on importers, and these tax burdens should mainly be borne by American consumers."

From the perspective of China's export structure, China's annual export volume of aluminum products is about 5 to 6 million tons, accounting for 12.85% of the output. In 2023, Mexico was the largest export destination for China's aluminum products, accounting for 9.6% of the total export volume of aluminum products. The United States and Canada accounted for 4.6% and 3.8% respectively, and the aluminum products exported to the North American Free Trade Area accounted for 18% of the total export volume of China's aluminum products.

Wen Xianjun believes that the development of China's aluminum industry should continue to focus on cultivating new consumer markets to drive the export of Chinese aluminum products. The consumption of aluminum in China is mainly domestic, and the tariff policy of the United States has little impact on the domestic aluminum market.

In terms of the import structure of the United States, according to the data of UNComtrade, in 2023, the United States imported a total of 1.6482 million tons of aluminum products, among which it imported 420,000 tons, 200,000 tons and 60,000 tons from Canada, China and Mexico respectively, accounting for a total of 41.7%. The sources of aluminum product imports in the United States are relatively concentrated. The imports from the top five importing countries, namely China, Mexico, Canada, India and Colombia, account for 75%, and the imports from China account for 36%.

In March 2018, the United States imposed an additional 10% tariff on aluminum products imported from around the world based on the investigation results, which took effect on March 23. Only Canada and Mexico were exempted. At the end of September 2024, the United States increased the additional tariff on some of China's aluminum products to 25% and also imposed a 25% tariff on the bauxite exported from China. The commodities whose tariffs were raised from 7.5% to 25% correspond to almost all aluminum products under items 604-7609.

At that time, due to the tariffs imposed by the United States on China's aluminum products, China's exports of aluminum products to the United States were halved. However, the overall import volume of aluminum products in the United States remained at around 2 million tons, mainly because the imports of aluminum products from other countries made up for the part of the reduced exports from China to the United States. And China's goods can enter the United States through re-export trade in Mexico and Canada.

Li Kui, a nonferrous metals researcher at HuaRong Rongda Futures, said: "In the short term, Trump's comprehensive increase in the import tariffs on aluminum from all countries will also indirectly affect China's exports and re-export trade to countries such as Mexico and Canada. However, considering that historically, China's aluminum products have faced anti-dumping investigations launched by many countries, and the corresponding anti-dumping tax rates range from about 10% to 75%. Affected by the anti-dumping duties, the export of aluminum products has already decreased by about 30% to 60%. Therefore, under a 25% tariff, the fluctuation of aluminum prices has not been significantly amplified. But in the medium and long term, it will have a certain adverse impact on China's aluminum export trade."