Automotive MMI: H2 Tariffs Still Dramatically Reshaping Automotive Market

The Automotive MMI (Monthly Metals Index) moved sideways, rising by a modest 2.48%. Recent developments have sent steel, aluminum and copper prices on a wild ride, forcing automotive manufacturers to scramble in response. Critical materials like galvanized steel and copper have seen rapid price swings due to H2 tariffs and supply chain jitters.

Tariffs Fuel Record Steel and Aluminum Costs

New trade policies introduced in 2025 are still dramatically reshaping the metal cost landscape. These moves, which are aimed at protecting the domestic industry, immediately tightened supply and drove prices to record highs. Hot-dipped galvanized steel spiked by more than 19% in February 2025 alone, reaching $1,122 per short ton. By early April, they had surged even further to roughly $1,208. Meanwhile, the all-in U.S. aluminum price (LME + Midwest premium) recently reached a record $4,816 per ton, nearly double its late-2023 low.

Copper Hits Record Highs on Import Tariff Threat

Aluminum and hot-dipped galvanized were not the only metals impacted by these policy adjustments. Copper has been especially volatile. In July 2025, President Trump announced a 50% tariff on copper imports (effective August 1) after a national security review. The mere threat of this new duty sent U.S. copper prices skyrocketing.

These unprecedented jumps reflect both initial tariff fears and surging demand from electrification. Copper is a key component in vehicle electrical systems, from wire harnesses to EV motors, so any sustained price increase directly inflates automotive production costs.

Automakers and Suppliers Feel the Squeeze

Steeper raw-material costs are filtering down to automakers’ bottom lines and even to showrooms. Before the latest tariffs, steel, aluminum and copper together accounted for roughly 5% of a vehicle’s production cost in the U.S. With the new duties, that share has jumped to as high as 9%

According to estimates by Benchmark Mineral Intelligence and others, the cumulative tariffs on metals add about $1,700 in extra costs to every car made in the U.S. and roughly $3,500 to every car imported from Canada or Mexico (even under USMCA trade rules). 

Such figures are staggering in a low-margin industry. Industry analysts warn that the average new car could cost at least $3,000 more as manufacturers pass along a portion of these raw-material increases to consumers. “At some point, all of these tariff-related costs will have to be pushed onto the consumer,” cautions David Adams, President of the Global Automakers of Canada. He added that higher prices may ultimately curb vehicle demand.

Navigating an Uncertain Road Ahead

There are a few glimmers of relief on the horizon, but also plenty of uncertainty. After sharp run-ups earlier this year, metal prices have shown tentative signs of cooling. For instance, U.S. steel prices began to unravel some tariff-induced gains by late spring as mills ramped up output. Meanwhile, hot-rolled coil and galvanized sheet prices drifted down in May. Copper also pulled back from its peak, suggesting the market may have found a near-term ceiling once the initial tariff shock was absorbed.

These moderate pullbacks hint that supply and demand could rebalance in the coming months. Indeed, shorter lead times at steel mills and an uptick in scrap availability have helped ease immediate shortages. However, industry experts caution that it’s far too early to celebrate a sustained cost downturn, as the trade environment remains highly volatile.

For U.S. automakers and procurement executives, the current situation demands strategic navigation. CFOs and sourcing chiefs must weigh locking in prices versus hoping for reversals. Simultaneously, they need to consider alternative suppliers or materials and keep a close eye on policy developments. As MetalMiner CEO Lisa Reisman has noted, the industry is in a “high-stakes balancing act” in which it must manage higher production costs and potential part shortages without alienating customers with sky-high prices.

Many firms are lobbying for tariff relief or exemptions while simultaneously hedging metal purchases and boosting efficiency to ride out the storm. In the coming months, all eyes will be on Washington and global commodity markets for any signs of cooling trade tensions or price moderation. Until then, U.S. automotive companies must drive forward with caution while acknowledging that today’s metal market volatility may very well be the new normal in the road ahead.

Automotive MMI: Noteworthy Price Shifts

• Chinese lead prices moved sideways, rising a modest 2.73% to $2,423.80 per metric ton.
• Hot-dipped galvanized steel prices moved sideways, dropping 2.38% to $985 per short ton.
• Lastly, Korean aluminum 5052 coil premium over 1050 moved sideways, falling 0.79% to $4.12 per short ton.