President Donald Trump's administration announced the extension of temporary exemptions for the key trading blocs at the last moment on Monday April 30. A 10% import tax on aluminium and a 25% import tax on steel were due to come into effect on Tuesday May 1.
“The administration is also extending negotiations with Canada, Mexico, and the European Union for a final 30 days. In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transshipment, and protect the national security,” the White House said in a statement.
The administration has agreed permanent exemptions from tariffs for Australia, Brazil and Argentina it said, without disclosing further details.
Three-month aluminium prices on the London Metal Exchange were static around the 5pm close at $2,255 per tonne after a tiny number of trades. Asian metal markets are largely closed for the May 1 public holidays.
US physical markets at multi-year highs
The physical market reaction to tariffs has been for spot prices to rise sharply.
The US is a major importer of both steel and aluminum; although domestic production is expected to be boosted as a result of import restrictions and metal for nearby delivery has been priced up considerably.
US Midwest delivered premiums for P1020 commodity grade aluminium have risen by 135% since the start of the year to average at 22.25 cents per lb as of April 27.
US hot-rolled coil (HRC) prices remain close to their highest levels in seven years and have risen 16% since US secretary of commerce Wilbur Ross filed a January 19 report to the US president recommending the imposition of tariffs.
The American Metal Market hot-rolled coil index was $864.2 per tonne on April 27.
The US has already agreed trade tariff exemptions from some other countries, with Brazil and South Korea offered exemptions from steel tariffs on condition that they accepted quotas for their steel exports to the US.
The United States has postponed imposing Section 232 tariffs on steel and aluminium imported from the European Union, Canada and Mexico, until June 1.