Goldman warns Trump’s next target may be aluminium

SINGAPORE: The Trump administration will probably impose a trade tariff on aluminium, according to Goldman Sachs Group Inc, which warned that while the exact form any new levy takes is hard to predict, it may increase United States prices of the metal.

“We think a trade tariff on aluminium is more likely than not to be imposed,” said analysts in a report. “The situation is fluid and there is still great uncertainty associated with the tariff rate, the targeted countries, and potential retaliations from America’s trading partners.”

US President Donald Trump slapped duties on solar panel and washing machine imports this week, spurring concern the decision may be the opening salvo before moves on other products, especially metals.

The rise in global trade tensions has sparked speculation other nations, principally China, may retaliate, leading to a tit-fortat escalation that endangers global growth. At present, Trump is weighing the findings of a study into aluminium imports submitted by Commerce Secretary Wilbur Ross.

“Imposing a tariff on primary aluminium alone would be devastating for US semi (semi-finished product) manufacturers, since they would not be able to compete with cheap Chinese semis if domestic primary aluminium becomes more expensive,” said Goldman.