Trump’s tariffs become reality

The big news this week was confirmation of President Trump’s tariffs on US steel and aluminium imports on national security grounds. This sent US steel prices even higher, but weighed on prices in China. Meanwhile, the latest data show that China’s imports of commodities slumped in February compared to January. But this was mainly down to the shift in the timing of the Lunar New Year holiday. And finally, a 313,000 gain in US non-farm payrolls on Friday reinforced expectations that the Fed will press ahead with a rate hike at its next FOMC meeting on 21st March and weighed on the price of gold. Next week is looking relatively quiet. We could learn more about how the US tariffs will be implemented in practice and which countries might be exempted. China’s industrial production and fixed investment data (both Wednesday) are likely to show that growth slowed in the first two months of this year. This could put downwards pressure on the prices of industrial metals, in particular.