THE PESO dropped further on Tuesday as the dollar strengthened after US President Donald J. Trump raised import taxes on steel and aluminum.
The local unit closed at P58.19 per dollar on Tuesday, weakening by 9.5 centavos from its P58.095 finish on Monday, Bankers Association of the Philippines data showed.
The peso opened Tuesday’s session weaker at P58.165 against the dollar. Its intraday best was at just P58.12, while it dropped to as low as P58.25 versus the greenback.
Dollars exchanged inched down to $1.194 billion on Tuesday from $1.197 billion on Monday.
The dollar was generally stronger on Tuesday due to Mr. Trump’s announcement of higher tariffs on steel and aluminum, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The pair closed higher on the back of a stronger dollar after Trump ordered 25% tariffs on steel and aluminum,” a trader likewise said by phone.
The peso also traded within a narrow range as the market awaited US Federal Reserve Chair Jerome H. Powell’s testimony to the Senate overnight, the release of January US consumer and producer inflation data, as well as the Bangko Sentral ng Pilipinas’ policy meeting on Thursday.
For Wednesday, the trader expects the peso to move between P57.90 and P58.30 per dollar, while Mr. Ricafort said it could range from P58.10 to P58.30.
The dollar firmed on Tuesday after Mr. Trump moved to substantially raise tariffs on steel and aluminum imports and said he would announce plans to impose reciprocal tariffs on other countries over the coming days, Reuters reported.
Currencies held in tight ranges in Asian trade in moves that were more modest than those on Monday, as Mr. Trump formalized what he had pledged over the weekend. Trading was thin due to a holiday in Japan.
Against a basket of currencies, the greenback was little changed at 108.35, holding to its slight gain from the previous session.
On Monday, Mr. Trump signed proclamations raising the US tariff rate on aluminum to 25% from his previous 10% rate and eliminating country exceptions and quota deals as well as hundreds of thousands of product-specific tariff exclusions for both metals. A White House official confirmed the measures would take effect on March 4.
The tariffs will apply to millions of tons of steel and aluminum imports from Canada, Brazil, Mexico, South Korea and other countries that had been entering the US duty free under the carve-outs.
The move will simplify tariffs on the metals “so that everyone can understand exactly what it means,” Mr. Trump told reporters. “It’s 25% without exceptions or exemptions. That’s all countries, no matter where it comes from, all countries.”
As he signed the order at the White House, Mr. Trump said he would follow Monday’s action with announcements about reciprocal tariffs on all countries that impose duties on US goods over the next two days, and said he was also looking at tariffs on cars, semiconductors and pharmaceuticals.
Asked about threats of retaliation by other countries against his new tariffs, Mr. Trump said: “I don’t mind.”
US data showed aluminum smelters produced just 670,000 metric tons of the metal last year, down from 3.7 million in 2000. Plant closures in recent years including in Kentucky and Missouri have left the country largely reliant on imports.
Steel imports accounted for about 23% of American steel consumption in 2023, according to American Iron and Steel Institute data, with Canada, Brazil and Mexico the largest suppliers.
Mr. Trump had already threatened to impose tariffs of 25% on all imports from America’s two largest trading partners, Canada and Mexico, saying they must do more to halt the flow of drugs and migrants across the US border. After some border security concessions, Mr. Trump paused the tariffs until March 1. — Aaron Michael C. Sy with Reuters
