【SMM Steel】The EU will take necessary measures to protect its interests if Trump imposes new 25% tariffs on EU cars, an EC spokesperson said. Trump announced he will raise tariffs on EU cars/trucks to 25% next week, claiming the bloc is not adhering to a previous trade agreement signed in summer 2025 that capped US tariffs on EU cars/parts at 15%. The EU says it is fulfilling its obligations. The EU has previously considered trade measures, including €93bn in retaliatory tariffs. German companies cut US investments by ~45% in the first year of Trump's second term due to trade uncertainty.

[SMM Tin Morning Briefing: The Most-Traded SHFE Tin Contract Opened Slightly Higher in the Night Session and Then Fluctuated Downward, While Downstream Enterprises Concentrated Their Restocking on Dips]

The US is expected to launch two new trade investigations into the “surplus industrial capacity” of 16 major trading partners, including China. According to officials from the Office of the United States Trade Representative, the move could trigger new tariff measures. In response, Chinese Foreign Ministry spokesperson Guo Jiakun pointed out that the so-called “overcapacity” is utterly groundless, and that China firmly opposes using this as a pretext for political manipulation. Meanwhile, the European Commission also made its position clear: if the US takes actions that violate trade agreements, the EU will “respond firmly.”

[SMM Aluminum Morning Meeting Summary: The SHFE/LME Price Ratio Continued to Weaken, and Aluminum Prices Were Expected to Fluctuate at Highs in the Short Term] Against the backdrop of continued tightening LME liquidity, LME aluminum still had upward momentum, with strong support from overseas prices, and the backwardation structure was expected to persist in the short term. China was in a phase of high inventory + weak fundamentals, and its upward momentum was clearly weaker than that outside China. Amid diverging domestic and external drivers, the SHFE/LME price ratio was expected to continue weakening, and aluminum prices were expected to continue fluctuating at highs in the short term.

He Yongqian, spokesperson for the Ministry of Commerce, stated that during German Chancellor Merz's visit to China, the two countries engaged in in-depth exchanges in the economic and trade field and reached over ten commercial agreements spanning multiple industries. Regarding the strengthening of export controls against Japan, He Yongqian noted that China has included relevant Japanese entities in its export control list and watchlist. This measure aims to curb Japan's "remilitarization" and nuclear ambitions and is entirely justified, reasonable, and lawful.

According to market reports, the European Union continues to contest the 2025 extension of US Section 232 tariffs on steel and aluminum derivatives, viewing them as a violation of existing trade agreements. While the EU seeks a rollback—emboldened by a recent US Supreme Court ruling that struck down separate "emergency" IEEPA tariffs—the US maintains that investigations into these derivatives were initiated before any trade deal was finalized. Currently, most EU steel exports face a 15% tariff entering the US, while nearly 40% of machinery imports from the EU are hit by a 50% tariff on their metal content. The dispute has notably stalled the ratification of the 2025 EU-US trade deal in the European Parliament.