Steel and Aluminum Tariff News... Asian Markets Fall, US Stock Futures Rise

Effective Date Not Disclosed

Chinese Markets Continue Tech Stock Rally on AI Hopes

This Week's US Markets Focus on Powell's Speech and January CPI Release

President Trump announced a 25% tariff on all steel and aluminum imports and plans to impose reciprocal tariffs this week, leading to mixed reactions in global markets on the 10th (local time).

According to Bloomberg and other foreign media, the MSCI Asia Pacific Index, a benchmark for Asian markets including Korea, Taiwan, and Vietnam, fell by 0.4%. In contrast, Japanese markets and Chinese and Hong Kong markets, which have already started receiving a 10% tariff, saw a continuous rise in tech stocks due to optimism about AI investment demand after the deep-sea.

Europe's Stoxx 600 Index rose by 0.3%. The Stoxx 600 Index showed an eight-week consecutive rise last week, marking the longest continuous rise since March 2024.

In the early morning Eastern Standard Time, US stock futures showed an upward trend, indicating a rebound from Friday's decline.

S&P 500 futures rose by 0.3%, Nasdaq 100 futures increased by 0.5%, and Dow Jones Industrial Average futures went up by 0.2%.

The dollar rose against major currencies such as the Canadian dollar and yen, preparing for heightened trade tensions. This is due to expectations that tariff increases could lead to inflation and make it difficult for the Federal Reserve to cut rates. The 10-year US Treasury yield fell slightly.

This week, several major events are drawing attention, including Powell's speech and US CPI data.

Bob Savage, head of market strategy and insights at BNY, said, "The market continues to react to changes in Trump's policies rather than economic data." Philip Wool, head of portfolio management at Railient Global Advisors, said, "US stock traders do not show a pronounced negative reaction to the tariff news." In the US market, it is pointed out that Trump's tariff threat is seen only as a negotiation strategy.

President Trump said the day before that tariffs on steel and aluminum would apply to all countries, but did not specify when they would take effect. Among the tariff measures Trump announced, tariffs on Canada and Mexico were suspended after the announcement, but tariffs on China are being applied.

If a 25% tariff is applied to steel, a 25% tariff will be applied to Korean and EU steel products imported into the US within the current agreement export volume without tariffs. Chinese and Russian steel products, which are already subject to a 25% tariff, will be subject to a 50% tariff.

According to US Census Bureau data cited by Bloomberg, as of the end of last year, Canada ranked first in steel exports to the US with $1.12 million, followed by Mexico, Brazil, China, Taiwan, and Korea ($3.2 billion). For aluminum, Canada overwhelmingly leads with $9.5 billion, followed by the UAE, Mexico, Korea ($643.7 million), and China.

Trump also imposed tariffs on steel and aluminum first during his first term in 2018. At that time, a 25% tariff was imposed on steel and a 10% tariff on aluminum. Since then, tariffs on Chinese, Russian, and Indian products have been maintained, but tariff exemptions have been maintained for most countries' imports through duty-free quota agreements.

President Trump also said this week he would announce reciprocal tariffs on countries that impose tariffs on US imports. Trump added that these measures would be implemented immediately.

Guest reporter Kim Jung-ah kja@hankyung.com