Trump’s tariffs shake global steel, aluminium trade, spark shipping chaos

The imposition of tariffs on steel and aluminium by former US President Donald Trump has triggered widespread disruptions across global supply chains, leaving automakers, builders, and consumers grappling with the fallout.

Shipping Chaos at Tampa Bay

The ripple effects of the tariff war were starkly evident at the Port of Tampa Bay when an ocean freighter from India, laden with tons of aluminium destined for multiple US locations, was abruptly forced to unload its entire cargo.

Originally scheduled to make subsequent stops in Mobile, Alabama, and Houston, the vessel was grounded at Tampa after the logistics provider’s client cancelled the remaining destinations. This sudden change came in response to the tariffs that were set to take effect the following day.

Jose Severin, a business development manager for logistics firm Mercury Resources, described the situation as “really disruptive.” He explained that to avoid the 25 per cent import duty on raw aluminium, it proved more economical to transport the cargo via costly flatbed trucks rather than continue to other ports.

US steel prices surge

Since Trump’s inauguration, the price of US-made steel has soared to its highest level in over a year. Automakers like Ford Motor Co. have warned that rising shipping charges could significantly affect the industry’s bottom line. Canada and Mexico, two major sources of steel imports, have threatened retaliatory measures, potentially exacerbating supply chain disruptions built over decades.

Canada’s swift response

In response to the sudden tariff announcement, Canada-based Algoma Steel Group Inc. took quick action. Following hours of uncertainty after Trump’s unexpected announcement and subsequent partial reversal of Canadian metal tariffs, Algoma’s CEO Michael Garcia halted shipments at the border, awaiting further clarity.

Dan DeMare, director of sales at Heidtman Steel Products Inc., revealed that the company scrambled to bring in as much Canadian metal as possible before the tariffs took effect. However, once the foreign metal crosses into the US, the 25 per cent tariff applies, which is then passed down the supply chain, ultimately impacting end consumers. DeMare noted that companies like Ford have no option but to absorb the cost, as breaking long-established supply chains is not feasible.

Domestic producers benefit amid price hikes

The tariffs, intended to boost US manufacturing, appear to have had some success. DeMare stated that his company had already shifted to sourcing only from American producers to avoid the hefty import duties.

US steelmakers, emerging from their worst year since Trump’s first term, are now seeing price increases of over 30 per cent this year, enhancing profitability. Similarly, Century Aluminium Co., the last remaining American aluminium producer, has seen its stock climb by 6.5 per cent.

Trade allies remain uneasy as tariffs force exporters to seek alternative markets. Brazil, the second-largest source of US steel imports, warned that shipments might be redirected to other nations. The country’s steel industry group, Aco Brasil, noted that American tariffs send a cautionary signal to nations struggling with a glut of cheap metal imports.

South Korea, Vietnam, and the European Union have already started to fortify their markets against an influx of steel redirected from the US.

Experts warn that while American manufacturers may see temporary gains, the long-term impact of such trade conflicts ultimately leaves consumers bearing the brunt of increased costs. As the dust settles on Trump’s tariff strategy, the lasting consequences on global trade remain to be fully realised, with key stakeholders warning that no one truly wins in a trade war.