Trump Announces 25% Tariff on Metal Imports, Gold Prices Soar

WASHINGTON, D.C. — U.S. President Donald Trump announced on Monday he would impose a 25% tariff on all steel and aluminum imports, set to take effect on Tuesday or Wednesday. This decision comes amid surging gold prices and concerns about global trade tensions, leading investors to seek safe-haven assets.

The spot price of gold rose by more than 1% to $2,896 an ounce on Monday, surpassing the previous record of $2,623 an ounce established at the end of 2024. Analysts attributed the surge in gold prices to fears surrounding Trump’s trade policies and their potential impact on economic growth.

“The precious metal is set to retain its upward bias, as long as President Trump’s policy threats continue to stoke fear and uncertainty through global financial markets,” said Han Tan, chief market analyst at Exinity Group.

Alongside gold, aluminum prices increased as well. The three-month aluminum contract on the London Metal Exchange saw a bump of 0.3%, reaching $2,635 per tonne. Analysts noted that the tariffs could cause supply disruptions while dampening demand.

Trump’s announcement comes as the U.S. imports significant volumes of metal, with Canada being a primary supplier. According to the American Iron and Steel Institute, around 44% of U.S. aluminum consumption in 2023 was met by imports.

“I suspect U.S. manufacturers will have to wear higher prices as a result of these 25% tariffs,” said Daniel Hynes, a senior commodity strategist at ANZ Bank in Sydney. Currently, U.S. reliance on aluminum imports is high, estimated at 40% to 45%, while steel import reliance is around 12% to 15%.

Canada, Brazil, Mexico, South Korea, and Vietnam are the largest exporters of steel to the U.S. In response to the announcement, South Korea’s industry ministry convened an emergency meeting with steelmakers to strategize ways to mitigate the tariffs’ impact. Hyundai Steel’s shares fell by as much as 2.9% following the news.

In Australia, Prime Minister Anthony Albanese announced intentions to advocate for exemptions from the U.S. tariffs, stressing the importance of “free and fair trade.”

Trump also hinted at potentially examining U.S. Treasury debt payments for fraud, which could indicate discrepancies in the nation’s public debt. U.S. Treasury currently reports a debt of approximately $36 trillion, over 120% of the GDP. Trump stated, “We’re even looking at treasuries… that could be an interesting problem.”

On the wider economic stage, higher interest rates could diminish gold’s allure. Tan indicated that if the upcoming Consumer Price Index data indicates higher inflation, it may prompt profit-taking in gold. Federal Reserve comments suggest a cautious approach to interest rates amidst steady inflation and a robust labor market.

The recent turmoil over tariffs and the subsequent market reactions highlight ongoing trade tensions that are likely to impact both commodity prices and overall economic growth. Investors and analysts will be keeping a close eye on developments throughout the week as the situation unfolds.