Issue 05, 2025 - This week's editorial: US tariff ping-pong bamboozles market, India digests new budget

Much of Asian trading was put on pause last week as China along with multiple other countries celebrated the Lunar New Year. However, Donald Trump following through on his tariff promise and India announcing its 2026 fiscal-year budget provided plenty of excitement for steel market participants. Turkish scrap prices meanwhile remained firm, despite sluggish steel demand, as the market braced for significant February-trading scrap price hikes in the US.

On Saturday, the US imposed a 25% additional tariff on imports from Canada – except for energy – and Mexico, and 10% additional tariff on imports from China, effective 4 February, citing a national emergency created by the flow of contraband drugs like fentanyl to the US. The blanket tariffs are likely to have a significant impact on the steel supply chain – not least Mexican automotive production – as well as US efforts to reduce inflation. Mexican President Claudia Sheinbaum and Canadian Prime Minister Justin Trudeau both ordered retaliatory measures on the US.

It would not be a Trump presidency, however, without a last-minute change of course. On Monday, hours before the tariffs were due to take effect, the US administration announced it would put off levying measures on Mexico for one month after the latter agreed to deploy 10,000 additional national guard troops to its border with the US to prevent the trafficking of drugs. Shortly thereafter, a similar deal was reached with Canada. How long these agreements satisfy the hard-balling, unpredictable Trump remains to be seen.

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