The Zhitong Finance App learned that recently, US manufacturers spent far more on raw materials such as aluminum, steel, and copper than overseas competitors. This trend is weakening business confidence and raised concerns about inflation before metal tariffs officially came into effect.

Over the past few weeks, the prices of these three key industrial raw materials in the US have continued to rise, partly because manufacturers stepped up stocks before US President Trump imposed tariffs on metals. In the process, US prices have been disconnected from the prices paid by manufacturers in other major industrial economies such as China, Germany, and Japan.

For aluminum consumers, spot supply prices are around 23% higher than in Europe. Steel prices are about 40% higher, exceeding Trump's planned 25% tariff on these two metals on Wednesday. In the copper market, although tariffs may take months to implement, according to calculations, US manufacturers are already paying about 10% more than European buyers.

These surcharges have disrupted the global metals market, and traders are shipping goods to the US just before tariffs are implemented to lock in profits. However, for manufacturers, the rise in price expectations triggered by Trump's trade agenda has created significant commercial resistance, exposing them to the risk of growing disadvantages with overseas competitors.

“Customers are concerned, and they're all thinking about how these costs will affect their end products,” said Dan Markham, president of Markham Metals Inc., an aluminum and steel manufacturer and distributor based in Wilmington, Massachusetts. He has seen prices rise and these costs are being passed on. “Our customers have to pay more.”

Aluminum premiums (additional costs consumers pay on top of exchange prices) have soared to record highs in the US. This means that since the beginning of the year, the price of standard aluminum ingots purchased by American buyers has risen 20%, reaching the highest point in nearly three years, while prices in Europe have remained basically the same.

For US steel, the benchmark price hit more than 900 US dollars per ton at the end of February, and has accumulated a cumulative increase of more than 30% this year. This is mainly due to expectations of tariffs on foreign supplies. Trump believes that such tariffs will boost US production in the long run, but there is growing evidence that consumers will pay for it in the short term.

Hamad Hussain of KITU Macro said in an interview: “You will see a sharp rise in prices in the short term, which will stimulate US steel production and price increases. You'll see this price increase and then the price will stabilize along the way.”

If history can be used as a reference, Trump's plan to impose tariffs on steel and aluminum imports is unlikely to reverse decades of declining market share and stagnant production. These materials were the first batch of tariffs during Trump's first term. In 2018, a 25% tariff was imposed on steel and a 10% tariff was imposed on aluminum. Since then, there has been little change in US steel production, and the idleness of domestic smelters has further led to a decline in US aluminum production.

Although copper is not on the tariff list, Trump's tariff threats are already altering global copper flows. At the end of February, the US President ordered the Department of Commerce to conduct an investigation and consider imposing tariffs on copper on national security grounds. This type of investigation usually takes months.

Goldman Sachs analysts expect that all copper shipped to the US will face 25% tariffs, which will keep COMEX copper prices at a high premium over other benchmarks.

Analysts led by Eoin Dinsmore said in a March 1 report that import tariffs are expected to “completely transfer to US domestic prices, and COMEX will maintain a continuous premium over LME.”