Raw material prices rise amid tariff uncertainty
Commodity prices continue to increase significantly, largely due to uncertainties around trade policies and tariffs imposed by the Trump administration.
Read our Fact Sheet for more information on tariffs and a product category breakdown.
The big picture: While the full scope and impact of tariffs are not fully known, the pricing and availability of commodities will likely continue to see an impact in the near term. Factors such as supply and demand, geopolitical events and economic conditions also contribute to price changes.
- The Trump administration is now focusing on domestic copper minerals policy with an executive order to investigate potential tariffs on copper imports.
- The domestic aluminum industry faces turmoil as the U.S. continues to evaluate tariffs on imports from Canada and Mexico. On March 11, the Trump administration dropped plans to impose an additional 25% tariff on Canadian aluminum and steel, which would have totaled 50%.
- Steel pipe suppliers announced a 6% price increase on March 3 in anticipation of U.S. tariffs. More increases are expected throughout the year. A 25% tariff on steel and aluminum imports into the U.S. took effect on March 12.
- Resin suppliers continue to work to bolster inventory levels in preparation for the construction season, but the outlook is mixed on future pricing and availability trends.
- Tariff threats have fueled a surge in Canadian wood prices, with lumber increasing to $91.01 per 1,000 board feet since the start of the year. The U.S. 25% tariff on Canada would add to the existing 14.5% tariff on softwood lumber imports.
- Global fuel demand outlook has been affected by potential impacts of tariffs and retaliatory measures between the U.S., China and Canada. Concerns about China’s consumption concerns persist as consumer and producer prices fall despite stimulus efforts.
By the numbers: Copper wire prices rose 20%, aluminum wire surged more than 30%, and steel pipe increased 18%–25% on March 3. Prices for resin and lumber also climbed, with HDPE resin up 8% and lumber increasing 16.55%. Crude oil prices fell 4.51% month over month, hitting a near two-year low on March 6 before slightly recovering.
U.S. job growth and inflation slowed in February
The Labor Department reported 151,000 added jobs, better than last month but less than the 170,000 forecast by economists. Unemployment rose slightly to 4.1%, and the labor force participation rate decreased by 0.2 percentage points. This was partly due to federal government job cuts, which reduced the federal workforce by approximately 10,000 workers.
The Federal Reserve kept interest rates on hold as it waits for trade policies to settle. The Federal Open Market Committee will meet again Tuesday–Wednesday, March 18–19.
By the numbers: The Consumer Price Index, which measures price changes across commonly purchased goods and services, fell to 2.8% down from 3% last month, the lowest yearly increase since April 2021. The Producer Price Index, which tracks average price changes experienced by producers and manufacturers, rose 3.2% from the previous year.
The intrigue: The combination of easing inflationary pressures helps reinforce the potential for rate cuts later this year, but uncertainty regarding policy changes and the impact of tariffs will affect future decisions.
Ocean freight rates drop as U.S. trucking market tightens
Ocean freight rates are dropping significantly, with a more than 20% decrease in the past 30 days and nearly 40% since the start of the year. Meanwhile, the U.S. trucking market remains a “shippers’ market,” even as capacity tightens and spot freight rates remain near historic lows. More carriers are exiting the market than entering, and load-to-truck ratios are increasing for vans and flatbeds. However, per-mile spot freight rates remain at or near historic lows.
Why it matters: These shifts in shipping and trucking costs affect global trade, influencing transit times and the cost of goods. The ongoing ceasefire talks between Israel and Hamas offer optimism that shipping through the Red Sea and Suez Canal could resume later this year, potentially reducing transit times and increasing capacity. However, U.S. tariffs on imports from China, Mexico and Canada, along with softening demand in some freight markets, add uncertainty.
- U.S. import volumes fell 10% in February from January but are still up 5% year over year.
- Chinese imports remain strong, up 8% from the previous year, though enacted tariffs on both finished goods and steel and aluminum could impact future volumes.
- The 10% tariffs on Canadian crude oil imports could drive up diesel fuel costs, particularly in the Upper Midwest and New England, affecting trucking costs.