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Tariffs Update March 5th, 2025

2025Industry Insights

This update is provided courtesy of EACC Ambassador Member Fifth Third Bank

 
Tariffs Today: The Potential Impact on Commodity Prices and Your Business

What You Should Know

  • Immediate Tariffs on Canada and Mexico: Effective today, the US has imposed tariffs of 25% on all goods from Canada and Mexico, except for Canadian energy products including oil, which will face a reduced 10% rate. This is significant considering that in 2024, nearly 5 million metric tons, or 60%, of the US's aluminum imports came from Canada. 
Similarly, nearly 60% of the US’ total crude oil imports come from Canada. Refineries handling the heavier grade Canadian Oil cannot immediately process lighter grades. Refinery output reduction could impact prices of gasoline and other refined products.
 
  • Tariff Increases on China: The 10% tariff on Chinese goods imposed in February is now doubled to 20%. China has retaliated with 10-15% duties on $13.9 billion of US exports, targeting LNG, coal, oil, and farm equipment. They have also imposed tariffs on American agricultural shipments.
  • What we are keeping an eye on: Wider spanning 25% steel and aluminum tariffs on all US imports are set to be implemented starting March 12, with more to roll out in April. Further, the talks of retaliatory tariffs are alive and well.
 
What It May Mean for Your Business
 
  • Supply Chains: Companies may experience higher costs, and potential delays for China sourced inputs. Now is an important time to evaluate the impact of potential higher costs, your ability to pass them along to clients, and potential risk management strategies.
  • Fuel Prices: Companies are faced with a cloudy outlook for 2025 and beyond.  Markets are weighing whether tariffs will reduce oil demand and offset potential upward price impacts from tariffs.  Heavy fuel consumers should consider their budgeted fuel expenses and whether locking in the price on a portion of forecasted usage can help mitigate potential downside risks.
  • Heightened Inventory Management: Companies should contemplate the impact on future purchases and existing inventory.  Some have elected to purchase additional inventory ahead of tariffs and/or lock in future purchases via a hedge.  Regardless, higher levels of inventory require greater risk management vigilance due to the impact underlying prices can have on their current value.
     

 

If you have any questions or would like to receive pricing, please reach out to: For general Commodities inquiries feel free to contact FifthThirdCommodities@53.com or call (513) 534-4460
 
This material is based upon information that we consider reliable, however we do not represent that it is accurate or complete and it should not be relied upon as such.  Past performance is not indicative of future results and involves the risk of loss.  This is not intended to provide specific investment advice and does not constitute a specific offer or solicitation, with respect to the purchase or sale of any swap or derivative transaction. Certain transactions, including those involving swaps and other similar instruments and securities, give rise to substantial risk and are not suitable for all investors.

Tariffs Update March 5th, 2025

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