US Tariffs Will Continue to Affect Peruvian Market Until at Least July: VT Markets Warns of Regional Impact

The recent decision by a U.S. appeals court to keep tariffs in place while their legality is resolved prolongs uncertainty in global markets. According to VT Markets, the effects are already being seen in international metal prices and in the volatility of Latin American currencies such as the Peruvian sol.

The oral argument hearing has been scheduled for July 31, which means that the tariffs imposed by former President Donald Trump—and recently doubled to 50%—will remain in effect for at least the next two months.

“There are real possibilities of partial reversal. But even if some tariffs fall, Trump can use other laws to reinstate them. So risks persist and there is no definitive solution in the short term,” explained Eduardo Ramos, Financial Markets analyst at VT Markets.

The legal tension has also led to a spike in volatility among regional currencies. For example, “the Peruvian sol and the Chilean peso saw slight declines on key trading days. Meanwhile, commodities reacted with an uptick: aluminum and steel rose between 14% and 19% in a matter of weeks,” added Ramos.

Likewise, it specifies that there is a possibility that the Court may make a decision that maintains or eliminates the current tariffs. Any change in this regard can generate instability in both prices and exchange rates, due to the uncertainty it creates in the market.

Steel and aluminum in Peru

In 2023, aluminum exports totaled US$1.453 billion, and although the country is not a major exporter of steel, it does hold a significant share of the iron, metallurgy, and concentrates markets.

“While price increases may improve revenue per ton, legal and commercial risks threaten access to the US, which remains a significant market,” explained Ramos. Between October 2023 and September 2024, Peru made more than 21,000 shipments of steel-related products, with Chile and Mexico as the main destinations.

Eduardo Ramos explains that, since the announcement of the tariff increase on June 4, the effects have been significant: the aluminum premium in the U.S. skyrocketed by 54% in a single day, reaching US$1.40/lb, a cumulative increase of 190% since November 2024. Meanwhile, in the steel market, futures rose 14% and coil prices advanced 7.4%.

“The market is already reacting, and this will not be a passing situation. Producers must rethink their pricing and risk models, as well as implement hedging in metals and currency futures to protect margins against new political or judicial surprises,” suggested the VT Markets analyst.