US President Donald Trump’s address to Congress on Tuesday March 4 contained key strategic policy objectives that will have a direct impact on global metals markets.
Fastmarkets takes a high-level view of the key strategies below:
“They tariff us…we will tariff them.” The Trump administration will introduce reciprocal tariffs on all countries that levy duties against the US effective April 2. This administrative tit-for-tat is designed to protect US markets from being flooded by foreign goods, particularly in instances where US entities are effectively barred from participating in foreign markets by prohibitively high tariffs. This will constitute the third type of tariffs — so far implemented in various stages against relevant jurisdictions — announced since February and follows broad “border” tariffs enacted on Tuesday March 4, with so-called “Section 232 2.0” tariffs to go into effect on March 12.
The president announced plans to make car loans deductible with the provision that the car is made in America. The automotive sector has been struggling with high interest rates and low consumer spending. Stimulating consumer demand in automotive is a net positive for flat-rolled steel, prime and shredded scrap, aluminium and copper consumption; all metals markets that have been targeted with tariff implications. The double-edged sword from prime scrap would be an excess of material from additional stamping operations — the grade is not price elastic and is generated in finite quantities by auto stampers. Honda have announced, effective May 2028, the relocation of its Civic production to Indiana from Mexico follow the imposition of border tariffs. The president stipulated that having spoken to the “Big Three” automakers — Ford, GM and Stellantis — that more will follow. Large sections of the American Rust Belt, including the upper Midwest and other traditional auto manufacturing hubs, have empty assets that could theoretically welcome back domestic automotive production. As of March 5, the market awaits a same-day announcement on potential tariff relief for trade-deal compliant sectors. This could include USMCA complaint ‘Big Three’ automakers plus Toyota and Honda.”
The end of President Joe Biden’s electric vehicle (EV) mandate. Auto majors who were straddling the line between internal combustion engine vehicles and electric vehicles now have a clear direction for their budgets. Traditional auto steel — sheet, body-in-white components and special bar quality — will likely see renewed strength, while demand for EV-specific steels, like electrical steels, may fall off somewhat.
“We didn’t give it to China, we gave it to Panama and we’re taking it back.” Plans to “regain control” of the Panama Canal under the guise of national security is underway, backed by Swiss and American investors including asset manager BlackRock. The key global trading route shortens shipping time between the Atlantic and Pacific Oceans. CK Hutchinson, a Hong-Kong conglomerate that has controlling shares in two ports, has agreed to divest its majority stake over concerns of the ports’ links to China, it was reported following the address. 6.14 million tonnes on iron and steel were shipped along the canal in 2024, according to the Panama Canal Authority. 5.66 million tonnes of metals and ores were shipped over the period and 3.28 million tonnes of coal and coke.
Plans to resurrect US shipbuilding via the creation of the White House office of shipbuilding, in a bid to bolster national defense, will be instrumental in formulating demand for steel, aluminium, stainless steel and copper alloys in particular. Shipbreaking also generates a proportion of highly-valued dense scrap such as punchings and plate. The reintegration of this industry into US manufacturing will be stimulated by special tax incentives, President Trump said.
Reinstatement of the 1-for-10 regulation rule, which stipulates that for every new regulation put on business, 10 others must be eliminated. President Trump decried long permitting phases for new greenfield projects and promised the return of his 1-for-10 regulation rule. This could potentially spur new steel projects, both greenfield and modernizations. It may also resurrect aging capacity that might have been too expensive to retrofit with modern environmental controls.
Withdrawal from the Paris Climate Accord and the associated suspension of Biden-era environmental protection policies. President Trump has signaled loud and clear that top-down pressure on the US green steel front is unlikely. Bottom-up pressure has been scant, but at least some market sources believe a premium is inevitable given the inherent advantages of a circular steel model — and the start-up costs that come with it.
“Drill, baby, drill” — an increase in fossil fuel production. Watch for renewed activity in the oil country tubular goods and line pipe sector as new land opens for drilling. It remains an open question, however, whether fossil fuel producers will be interested in adding to already historically high production and threatening prices.
Partnering with Japan and South Korea, among others, on a liquified natural gas (LNG) pipeline in Alaska. In early February, President Trump reiterated that he would not let Japan’s Nippon Steel buy US Steel — but he would allow the company to “heavily invest” in the legacy steelmaker. In the next sentence, President Trump pivoted to a planned LNG export line to Japan. While not explicitly a tit-for-tat exchange, President Trump hinted that the line was yet another step toward linking the US and Japanese industrial sectors. The line itself would require more than $590 million in steel line pipe.
President Trump branded the CHIPS Act, which authorizes an approximate $280 billion in new funding to boost domestic research and manufacturing of semiconductors in the United States, “horrible” as part of his address. Semiconductors are key components for production in the consumer electronics, automotive, telecommunications, artificial intelligence and healthcare industries and utilize minor metals including gallium, indium, high-purity silicon, hafnium, tungsten, antimony, titanium and cobalt, as well as copper and zinc. The president announced that Taiwan Semiconductor, who captures an estimated 97% of the semiconductor market, had pledged a $165-billion investment to build semiconductors in the US the previous day.
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