Rio Tinto's CEO Jakob Stausholm traveled to Washington this week, seeking clarity from U.S. officials on the long-term direction of President Donald Trump's revived tariff policies. The move follows the administration’s decision to impose a 25% import tax on all steel and aluminum, ending exemptions previously granted to allies including Canada and the European Union.

This is not the first time industrial tariffs have disrupted commodity flows. The 2018 Trump-era trade measures under Section 232 of the Trade Expansion Act had similar goals—reviving domestic output by shielding it from foreign competition—but they also triggered supply chain volatility, diplomatic tensions, and retaliatory tariffs. Stausholm’s visit suggests Rio Tinto is bracing for a repeat of that environment.

Canadian Aluminum Becomes a Liability in a Politicized Market

Rio Tinto produces over 3 million tons of aluminum annually, and nearly half of that volume is refined in Canada, which is now subject to the new tariffs. While the company also operates copper and gold mines in the U.S., its integrated North American supply chain relies heavily on uninterrupted cross-border trade.

In 2018, similar tariffs caused sharp price swings in base metals, with aluminum premiums in the U.S. Midwest rising more than 30% year-over-year, according to CME data. History suggests that if these new tariffs remain in place, U.S. buyers could once again face higher input costs, while international producers may struggle to maintain margin.

Stausholm Signals Concern Without Escalating Tensions

By holding the company’s annual earnings presentation in Washington, Stausholm is making a calculated move to underscore the seriousness of the issue without alienating U.S. policymakers. His public remarks have remained cautious, emphasizing the need for predictability and transparency rather than direct opposition to the policy.

This mirrors the approach taken by industrial leaders during the first round of trade friction under Trump, when companies like Boeing, Caterpillar, and Ford expressed concerns about input costs but stopped short of open confrontation. Stausholm’s meetings with senators and administration officials are likely aimed at testing whether exemptions or negotiated carve-outs might be on the table.

Investors Should Prepare for Volatility as Trade Becomes a Policy Tool Again

From an investor perspective, the return of tariffs as an active policy instrument raises significant risk across the metals space. Aluminum markets are particularly vulnerable, but ripple effects could extend to copper and iron ore, especially if global supply chains begin to fragment further.

Historical precedent shows that protectionist measures often introduce short-term price spikes, followed by uneven adjustment periods. While U.S. producers may benefit in the near term, industries that rely on imported materials could face margin compression. Rio Tinto’s exposure to these dynamics is material, and Stausholm’s diplomatic push is a clear sign that the company is not counting on policy stability.

The message for investors is clear: policy risk is back on the table, and commodity strategies will need to factor in not just demand fundamentals but the shifting winds of geopolitics.