4 March 2026 – The conflict between the United States and Iran is currently pushing aluminium prices higher. Instead of granting an exemption under CBAM, the European Commission now intends to suspend MFN tariffs on fertilizers, while simultaneously acknowledging that the combination of CBAM and tariffs creates significant double burdens.
Aluminium Prices Rise Sharply
The open conflict between the United States and Iran, which escalated over the weekend in the Middle East, is already affecting aluminium prices.
The Gulf region hosts some of the world’s most important producers of aluminium products, including semi-finished materials such as billets. Iran’s threatened blockade of the Strait of Hormuz, located between the Persian Gulf and the Gulf of Oman, is currently restricting unrestricted access to the ports of most neighboring states.
Between 27 February and 3 March, aluminium prices on the London Metal Exchange (LME) had already risen by more than 3%. On Wednesday, aluminium briefly climbed above $3,300 per tonne. On the Shanghai Futures Exchange, aluminium contracts have gained more than 3% since Friday.
EU Commission Plans to Suspend Fertilizer Tariffs
The European Commission in Brussels rejected calls last week to suspend the CBAM carbon border tax for fertilizers. However, it acknowledged that CBAM will create additional price pressure and has therefore proposed a parallel measure: the temporary suspension of remaining Most-Favoured-Nation (MFN) tariffs on ammonia, urea, and certain other fertilizers.
Wopke Hoekstra stated: “These measures will help offset the impact of CBAM. This is a win-win situation for European farmers and industry alike.”
Significant Double Burden from CBAM and Tariffs
While the Commission acknowledges the considerable double burden created by the combination of CBAM and tariffs, it is simultaneously pushing forward new MFN tariffs and import quotas on steel and stainless steel.
At the same time, MFN tariffs of 5.5 – 6.5% in the agricultural sector are apparently considered high enough to justify suspension. By contrast, 50% tariffs on steel are presented by the EU as justified.
Fertilizers imported into the EU, much like steel, are already subject to extensive trade defense measures and import quotas.
If the Commission’s logic regarding fertilizers were applied consistently, similar relief measures would need to be extended to steel products in order to offset the negative impact of CBAM on the metalworking sector-an industry largely composed of small and medium-sized enterprises.
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