Trade tensions emerge early in Trump 2.0 with tariff threats on China, Mexico and Canada; aluminium industry on edge

At the dawn of the new presidential era on January 20, 2025, Donald Trump announced his intent to impose a 10 per cent tariff on Chinese product imports, including aluminium, as early as February 1. Following the news, the three-month aluminium price on the London Metal Exchange decreased by 0.9 per cent to US$2,611 per tonne, feeling the pressure of trade tensions.

On his second day in office, the US President called for an investigation into US-China trade to assess potential penalties on Chinese goods. Previously, he had threatened China with a 60 per cent tariff on imports but later adjusted his proposal to a 10 per cent duty, despite which China's blue-chip CSI 300 index and the Shanghai Composite index closed nearly 1 per cent lower, representing the highest fall in nearly two weeks. Hong Kong's Hang Seng index also demoted 1.8 per cent following the news.

In addition to China, Donald Trump also singled out the European Union, Mexico, and Canada, expressing his plans to impose tariffs on them too. During Tuesday's event at the White House, he said, "We have a $350bn [£283bn] deficit with the European Union. They treat us very, very badly, so they're going to be in for tariffs."