Trump tariffs: How high can metal prices go in 2025?

As President Trump reimposes and expands tariffs on imported steel and aluminum, markets are already responding with significant price movements. The announcement of a 25% tariff on all imported steel and aluminum-up from the previous 10% on aluminum-has sent ripples through various industries, particularly affecting food and beverage manufacturers who rely heavily on these materials for packaging.

The policy shift comes at a challenging economic moment, with inflation having risen 3% year-over-year in January, putting additional pressure on consumers already dealing with elevated prices across various sectors. 

What's particularly noteworthy is that these tariffs aren't new-they represent an expansion of policies first implemented during Trump's initial term, but with fewer exemptions and higher rates.

Aluminium surges to record highs

The market's reaction has been swift and dramatic. US Midwest duty-paid aluminum premiums have skyrocketed to over 40 cents per pound (nearly $900 per metric ton)-representing an astonishing 60% increase since the beginning of 2025. This surge reflects the market's anticipation of supply constraints and higher costs.

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Industry experts point to a fundamental issue: the United States remains a net importer of aluminium, with domestic production capacity insufficient to meet demand. Canadian smelters, which accounted for approximately 70% of the 3.92 million tons of primary and alloyed aluminium exported to the US last year, will be subject to these tariffs despite their critical role in the supply chain.

Steel tariffs 2025: The Can industry's vulnerability

The impact on the can manufacturing sector could be particularly severe. The US produces approximately 135 billion metal cans annually, including 115 billion aluminium beverage cans and 20 billion steel cans for food and other products. While imports account for only about 10% of the aluminium used by American can-makers, roughly 70% of the tin mill steel used for food cans comes from foreign sources.

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What makes this situation more precarious is the diminished domestic production capacity. Following Trump's initial steel tariffs in 2018, nine American tin mill steel producers shut down, leaving only three production lines operational in the US today. This limited domestic capacity means manufacturers have little choice but to pay the higher prices for imported materials or pass costs on to consumers.

Gold prices 2025: beneficiary of trade tensions?

While industrial metals face price pressures from tariffs, gold has been attracting buyers amid the growing uncertainty. Trading around $2,915 per ounce in early 2025, gold has benefited from its traditional role as a safe-haven asset during periods of economic and geopolitical uncertainty.

Analysts note that historically, gold prices have risen alongside inflation-when the Consumer Price Index began its steep ascent in August 2020, it coincided with gold reaching then-record highs. Similarly, during the high inflation period of 1980 when rates hit 13.5%, gold surged to record levels that weren't surpassed until 2006.

The combination of tariff-induced inflation and geopolitical tensions under Trump's second term could continue to support gold prices throughout 2025. Trump's positions on NATO, Ukraine-Russia relations, and the Middle East conflict have created additional uncertainty in global markets, typically a favourable environment for precious metals.

Looking ahead: metal price forecasts for 2025

For metals markets, the outlook for 2025 suggests continued volatility. Aluminium premiums could remain elevated as supply chains adjust to the new tariff regime. Steel prices, particularly for specialty products like tin mill steel, may see sustained increases due to limited domestic production capacity.

Meanwhile, gold could continue its upward trajectory if inflation accelerates and geopolitical tensions persist, potentially testing new record highs later in the year.

Key levels to watch on the Aluminium chart are $2,712 on the upside and $2,646 on the downside. 

Key levels to watch on the gold chart are $2,931 and $2,948 on the upside and $2,890 and $2,873 on the downside.