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LATAM: Trump Threatens Steel, Aluminium Tariffs, Gold Hits Fresh Record High

LATAM
BulletEM BulletEmerging Market News
  • Mexico is in the firing line again at the start of the week, after President Trump said that he would impose 25% tariffs on all steel and aluminium imports. Trump said yesterday that tariffs would apply to imports of both metals from all countries, although he didn’t say when the tariffs would take effect.
    • According to Bloomberg, citing US census bureau data, Mexican imports of steel totalled $6.5bn, ranking second on the list behind Canada on $11.2bn. Brazil and China (~$5.2bn each) were next, with Taiwan ($3.8bn), South Korea ($3.2bn) also ranking highly. For aluminium, Canada again topped the list, with the US importing $9.5bn last year, followed by the UAE ($1.1bn). Imports from Mexico, S. Korea and China were more modest at ~$500-700mn.
    • In the absence of further details, and with the timing unclear, the impact is relatively limited at this juncture, with USDMXN broadly unchanged, in familiar territory around 20.60.
    • Spot gold has headed higher, however, amid the tariff news, with the yellow metal up 1.4%, moving above the $2,900 level in recent trade. Next resistance above here is at $2,917.5, the 1.764 projection of the Nov 14 - Dec 12 - 19 price swing.
    • Meanwhile, President Trump is also expected to announce reciprocal tariffs this week on countries that tax US imports, without providing further details. He said these would be enacted almost immediately after an announcement.
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  • Mexico is in the firing line again at the start of the week, after President Trump said that he would impose 25% tariffs on all steel and aluminium imports. Trump said yesterday that tariffs would apply to imports of both metals from all countries, although he didn’t say when the tariffs would take effect.
    • According to Bloomberg, citing US census bureau data, Mexican imports of steel totalled $6.5bn, ranking second on the list behind Canada on $11.2bn. Brazil and China (~$5.2bn each) were next, with Taiwan ($3.8bn), South Korea ($3.2bn) also ranking highly. For aluminium, Canada again topped the list, with the US importing $9.5bn last year, followed by the UAE ($1.1bn). Imports from Mexico, S. Korea and China were more modest at ~$500-700mn.
    • In the absence of further details, and with the timing unclear, the impact is relatively limited at this juncture, with USDMXN broadly unchanged, in familiar territory around 20.60.
    • Spot gold has headed higher, however, amid the tariff news, with the yellow metal up 1.4%, moving above the $2,900 level in recent trade. Next resistance above here is at $2,917.5, the 1.764 projection of the Nov 14 - Dec 12 - 19 price swing.
    • Meanwhile, President Trump is also expected to announce reciprocal tariffs this week on countries that tax US imports, without providing further details. He said these would be enacted almost immediately after an announcement.