Metals and mining tariff scenarios: potential impacts of new US tariffs on metals markets

Following the 2024 US presidential election, Donald Trump's return to office has ushered in a new era of trade policies, reminiscent of his first term but with renewed vigour and broader scope. This shift in America's trade stance has sent ripples through the global economy, prompting a reassessment of international trade relationships and economic strategies worldwide.   

The scale of Donald Trump’s new US tariffs – be they already implemented or merely threatened – has far-reaching implications for the energy and natural resources sectors. The lower economic growth they entail will curb commodity demand, prices and investment, while higher import prices will raise costs in sectors from battery storage to liquefied natural gas (LNG). 

Such uncertain times require planning for divergent outcomes. Wood Mackenzie has developed three distinct scenarios that consider the potential impacts on global GDP, industrial production, and supply, demand and prices out to 2030 in four sectors: oil, gas and LNG, renewable power, and metals and mining. 

In our latest Horizons piece, ‘Trading cases: tariff scenarios for taxing times’, we explored all three distinct scenarios across various industries. Here were the key findings for metals and mining: 

The trade scenarios for metals and mining 

Our experts identified three trade scenarios for the metals and mining industries: 

• Trade truce: Limited impact on most metals; tariffs on steel and aluminium remain 

• Trade tensions: Lower growth weighs on metals demand from manufacturing 

• Trade war: All projected metals growth through 2026 in the trade truce scenario wiped out 

Diving into the scenarios 

In the trade truce scenario, the principal impacts of tariffs are on steel and aluminium, caught in the crossfire of US sections 232 and 301. Copper remains under review by the administration, but like all other metals, it has been exempted from US import tariffs. If this holds, the effect on most metals will be muted, with metals-intensive manufacturing activity remaining relatively robust. 

In the trade tensions scenario, lower economic growth starts to weigh on metals demand from the manufacturing sector. With an effective 10% tariff rate, annual copper and aluminium demand falls by 300 kt and 1.5 Mt, respectively, compared with the trade truce scenario. 

In the trade war scenario, aluminium demand falls almost 4 Mt in 2026, with copper down 1.2 Mt, compared with our trade truce scenario. Steel demand drops by a projected 90 Mt and lithium demand by 70 kt. All projected growth through 2026 under our trade truce scenario is wiped out in a tariff war. 

China’s manufacturing export sector feels some of the worst direct impacts. Exports to markets other than the US help soften the blow, but weaker global demand for Chinese exports hammers manufacturing margins. Chinese exports flooding the global market may prove damaging for competitors, including Japan and South Korea. 

After 2026, recovering industrial production improves metals demand growth. There is permanent scarring, however, with demand losses still not fully recovered by 2030. This has implications for metals supply into energy transition sectors. Concerns about under-investment in mining for low-carbon technology metals subside in the near term, but are likely to be short lived. A lower price environment encourages companies to delay bringing additional supply into production as investors sit tight. Looming supply gaps soon open again after 2030, as the mining pipeline dries up and the capital investment rates required to meet demand decline. 

Learn more 

To learn more about the impacts of new US tariffs on oil, gas and LNG, renewable power, and metals and mining, read our full Horizons piece: ‘Trading cases: tariff scenarios for taxing times’.  

Plus, to get more clarity on how to navigate such a volatile market, learn more about Lens Metals & Mining; our premium platform for unlocking expert insights and data across all key mined commodities.