Tariffs, Trade & Transformation

US President Donald Trump has announced a slew of new tariffs since his inauguration on 20 January 2025 that have the potential to reshape global mineral trade, altering trade flows and supply chains. These changes could also impact partnerships introduced under the Biden administration to guide collaboration on critical mineral supply resilience. On 12 March 2025, Trump targeted the mineral market, imposing sweeping 25% tariffs on steel and aluminium imports, mirroring similar measures taken in 2018. In late January 2025, Trump threatened to put tariffs on copper imports. While they have yet to materialise in the latest round of tariffs (at the time of writing), the prospect of copper tariffs remains a looming concern for market players. Recent actions have also zeroed in on Latin America, with Trump imposing 25% tariffs on Mexico on 4 March 2025, alongside new tariffs on Canada and Mainland China. However, on 6 March 2025 Trump announced exemptions for goods under the US-Mexico-Canada Agreement.

Trump’s aggressive trade policy shifts are poised to have far-reaching implications for mining markets in Latin America. The region’s proximity to the US and its abundant mineral wealth have established it as a key trading partner in the metals and mining sector. Notably, Mexico, Chile, and Brazil are significant players, accounting for 23% (US$18 billion) of total US imports of iron, steel, copper, and aluminium in 2024. Over the years, the US has strategically negotiated and implemented several free trade agreements with Latin American metal-producing countries – including Mexico, Chile, and Peru. These agreements, along with tariff exemptions and other preferential trade arrangements negotiated to facilitate trade, are now under threat.

Latin American markets will likely look to diversify their export base amid the ongoing stream of trade-related developments, with the EU and Mainland China emerging as key alternative markets. Evolving trade dynamics may also present opportunities for Mainland China to expand its presence in the region. Furthermore, the region is poised to undergo a restructuring of foreign investment flows in the mineral sector, as companies reassess their strategies in response to trade tariffs. Trump’s policy shifts are also expected to have the capacity to prompt retaliatory actions from major Latin American trading partners.

Brazil: Steel hit hardest, critical minerals present opportunities

The US accounted for 48% (US$5.7 billion) of Brazil’s total iron and steel exports and 17% (US$0.3 billion) of Brazil’s aluminium exports in 2024. This heavy reliance leaves the country vulnerable to US policy shifts. Prior to the new tariff imposed on 12 March 2025, Brazil’s steel and aluminium exports to the US enjoyed an exemption from tariffs under Section 232 of the Trade Expansion Act of 1962.

Domestic steel producers are set to face significant challenges in finding alternative export markets, with the newly imposed tariff exacerbating already weak market conditions and persistent overcapacity issues. Companies will likely reassess their investment strategies to navigate the uncertain market landscape. Such uncertainty may cause producers to be more cautious, reducing local investment activity as they seek to prioritise risk management and consider alternative destinations for investment. Amid escalating concerns about the impacts of tariffs, the Brazilian Steel Institute (Instituto Aço Brasil) and the National Industry Confederation (Confederação Nacional da Indústria) have encouraged negotiations with the Trump administration. Brazil is the US’s second-largest import market for US iron and steel products after Canada, leaving room (albeit marginal) for negotiations that could lead to exemptions or special agreements.

 

This is a preview of an article that was originally published in the May 2025 issue of Global Mining Review.

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