Author: Stjepan Kalinic

The U.S. election results have stirred up first reactions in the markets. Analysts from JPMorgan Chase & Co see Donald Trump’s return to the White House as a potential shift in the commodity market.

The bank’s equity research analyst, Bill Peterson, noted Trump’s history of deregulation and tariff-heavy policies, suggesting that this approach could lead to greater domestic support for the U.S. steel industry.

“We expect a broad-based positive knee-jerk reaction for steel equities,” Peterson said in a note, pointing to the likely impact of more tariffs on Chinese and Mexican steel. In contrast, metals closely tied to the Chinese market, such as copper, may face downward pressure due to heightened U.S.-China trade tensions.

United States Steel Corporation X shares closed the day rallying over 8%.

Concerns about tariffs are particularly high in Canada, where Toronto’s commodity-heavy market is sensitive to U.S. economic policy. The Toronto Stock Exchange’s materials sector has already felt the impact, with GreenFirst Forest Products ICLTF closing Wednesday down 3.40%.

While the U.S. dollar had periods of decoupling from its typically inverse correlation to commodity prices, that was not the case following the election results.

“A strong U.S. dollar has somewhat weighed on commodity prices,” Douglas Porter, chief economist at BMO Capital Markets, said per Reuters.

Notably, Porter was one of the voices pointing out the elephant in the room: the budget deficit issue.

“The reality is that neither presidential candidate has offered any serious path to reining in the budget deficit — quite the opposite for the most part,” he wrote in September.

Porter’s current insight reflects a broader worry that if Trump imposes aggressive tariffs, the Canadian market’s reliance on resource exports could be at risk, impacting commodity-driven industries across North America.

Over his first term, Trump has consistently supported the U.S. mining sector. In 2020, he issued an executive order backing critical mineral mining, stating, “A strong America cannot be dependent on imports from foreign adversaries for the critical minerals necessary to maintain our economic and military strength.”

Trump’s 25% tariff on imported steel and 10% on aluminum from 2018 was eventually revoked by the Biden administration.

Trump’s emphasis on “American independence” in mining could signal more federal backing for domestic projects if he pursues similar policies in his second term.

Still, experts warn about the necessity from the demand side.

“There’s not actually much being done on the demand side to make sure that these products are going to have an off-taker,” said John Jacobs, a senior policy analyst at the Bipartisan Policy Center per S&P Global.

Yet, the mining issue might be too complex for any administration to address over a single term. Currently, there are no operational U.S. mines focused on essential battery metals like cobalt or graphite and only one active nickel mine.

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