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- Trump pledged 25% tariffs on steel and aluminum, lifting commodity prices and hitting some currencies.
- Gold hit a record high of above $2,900 while the Australian dollar lost ground to the greenback.
- Trump also threatened blanket reciprocal tariffs but stocks were largely unfazed.
Commodity prices climbed and related currencies softened against the dollar on Monday after President Donald Trump said he would impose 25% tariffs on all steel and aluminum entering the US.
Speaking on Air Force One en route to the Super Bowl in New Orleans, Trump also said the US would impose reciprocal tariffs on every country that charged import duties on American goods.
“If they charge us, we charge them,” he said.
Futures tied to aluminum rose about 0.2%, iron ore gained 0.1%, copper rose as much as 0.8%, silver climbed 0.9%, and gold rose 1.4% to record highs of more than $2,900 an ounce.
The Australian dollar and Norwegian krone weakened slightly against the dollar, while the Canadian dollar strengthened after initially softening.
Analysts at Dutch bank ING expect gold to hit more record highs this year, with $3,000 an ounce now within reach: “The macro backdrop will remain favorable for gold as interest rates decline and foreign reserve diversification continues amid geopolitical tensions.”
“We think that this move could boost the gold price, as it may lead to a further flurry of demand to bring gold on shore to the US, in case Trump imposes tariffs on precious metals,” Kathleen Brooks, research director at XTB, said about the president’s metals tariffs.
Brooks pointed to bitcoin, which slipped below $95,000 then rallied to nearly $98,000 early Monday, as a sign that markets are growing more “resilient” to Trump’s tariff talk — or at least have become more comfortable “trading through them.”
The European Union said in a statement that it would “react” if the US imposed levies on steel and aluminum arriving from the trading bloc.
Trump has made multiple tariff threats since taking office on January 20. He briefly dangled 25% tariffs on Mexican and Canadian exports to the US before agreeing to suspend them for 30 days. On the other hand, he followed through with an additional 10% tariff on Chinese goods, and Beijing’s retaliatory duties on some American goods took effect on Monday.
“The reintroduction of aggressive trade barriers is now an irreversible reality of Trump’s presidency,” Nigel Green, CEO of global financial advisory deVere Group, said in a morning note.
“Investors must wake up to the fact that tariffs are no longer solely a bargaining chip—they are a permanent, destabilizing force in the global economy,” he added.
Despite the mounting trade tensions, US stock futures were in the green and both European and Asian indexes opened broadly higher.
US Steel stock rose close to 6% in premarket trading, after falling almost a fifth in the past 12 months.
A takeover by Nippon Steel was blocked on national security grounds by the Biden administration. Trump said on Friday that the Japanese company would drop its bid and instead “invest heavily” in its American rival.
