Tariffs, Trade, and Future Prices: What’s Happening with Copper and Aluminum?

 

Tariffs, Trade, and Future Prices: What’s Happening with Copper and Aluminum?

When Trump imposed tariffs on steel and aluminum in 2018, it led to higher raw material costs in the automotive industry, squeezing profit margins and reducing profitability. If a similar situation unfolds now with aluminum and copper, it could hit industries hard — especially electric vehicles and renewable energy, which heavily rely on these metals.

The US is increasing control over the metal market to boost local production and cut the trade deficit. The Trump administration has imposed a 10% tariff on Chinese imports and a 25% tariff on all imported steel and aluminum, set to take effect on March 12. A tariff on copper is also being considered in the near future. But what does this really mean for the market – and for the prices of these critical raw materials?

Findings from 2018 suggest that tariff increases did not achieve the intended goal of reducing the US trade deficit. Instead, they led to higher costs for American businesses and increased tensions in global trade. Past experience shows that tariffs on metals do not necessarily benefit US industries. According to Finansavisen (2025), citing The Wall Street Journal, previous tariffs caused American metal producers to raise prices significantly. This resulted in higher costs for both imported and domestic metals, ultimately hurting industries and consumers alike.

Photo: Alex Brandon / AP / NTB

Will it lead to higher costs and market shortages?

If aluminum and copper become more expensive to import, American companies will either have to pay more or look for new suppliers. This could boost demand for locally produced metals, which might push prices up for both businesses and consumers. At the same time, if China exports less to the US, it could lead to shortages, adding even more pressure on prices. If US production doesn’t ramp up fast enough to meet demand, prices could rise significantly.

Higher metal prices could impact major industries like automobile manufacturing and construction, where aluminum is a key component. Copper is essential for electric vehicles and green energy, but rising costs could drive up expenses and potentially slow down investments in sustainable solutions.

What happens if other countries retaliate and a trade war breaks out?

China has already imposed retaliatory tariffs against the US. If the EU or other major economies follow suit, it could trigger an escalating trade war, with more countries raising barriers to metal trade. If countries respond to the tariffs as they did in 2018, it could trigger a price war in global trade, which would particularly impact Norway as a small and open economy.