British wholesale gas prices have reached a more than two-year high, risking yet more expensive energy bills.

Low rates of gas storage in Britain and across Europe, combined with cold weather, have increased demand for gas to heat homes.

It’s brought the price up to 140 pence a therm (a unit of heat used to measure gas), a high not seen since January 2023.

Higher gas prices can bring up household bills as electricity costs are linked to wholesale costs.

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Britain is reliant on European gas imports and has less storage capacity than its neighbours.

Last month, the owner of Britain’s largest gas storage site said levels in the country were “concerningly low”.

European storage levels have been depleted by cold weather and are now at approximately 50% capacity, well below the roughly 70% level recorded this time last year.

Gas is bought during cheaper periods, including when demand is lower in the summer, and then stored for use during times of high demand.

Britain is still reliant on the fossil fuel to generate electricity and heat homes and so is vulnerable to volatile prices.

Global trade tensions have stoked fears of more supply shocks. On Monday, China slapped a 15% tariff on US gas in response to Donald Trump’s tax on Chinese imports.

Since Russia’s invasion of Ukraine three years ago gas costs have increased as Europe sought to limit its use of Russian supplies. Russia, however, remains a key source of gas for the continent.

Already expensive bills

Energy bills have already been going up. At the start of last month, energy regulator Ofgem brought up the energy price cap, which limits the unit cost of energy, amid forecasts of a further rise in April.

The energy price cap is revised every three months. A final decision on the cap for April, May and June will be made on 25 February.

Few materials matter quite as much as steel and aluminium.

Steel, an alloy of iron and carbon, is the main metallic ingredient in the structures we live in and the bridges we build. If it’s not made of steel it’s made with steel.

Aluminium, on the other hand, is a wonder material we use with wild abandon these days. A light metal we use in planes and trains, in the bodies of electric vehicles and in those high voltage power lines we’ll need so many of to provide electricity in the coming years.

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All of which is to say these metals are the bedrock for much of the world around us. And like most developed economies, the US is far from independent when it comes to these materials. The degree of dependence on other countries varies between them.

According to the US Geological Survey, America’s “net import reliance ratio” for aluminium is close to 50%, implying it is deeply dependent on imports to satisfy demand among its companies. The degree of dependence is considerably lower for steel – only a little over 10%.

At least part of the idea behind tariffs is to bring some production back to the US, but imposing them will have consequences.

What kinds of consequences? Well, at its simplest, tariffs push up prices. This is, when you think about it, blindingly obvious. A tariff is a tax on a good entering the country. So if aluminium and steel are going up in price then that means, all else equal, that the cost of making everything from aircraft wings to steel rivets also goes up. That in turn means consumers end up paying the price – and if a company can’t make ends meet in the face of these tariffs, it means job losses – possibly within the very industrial sectors the president wants to protect.

So says the economic theory. But in practice, economics isn’t everything. There are countless examples throughout history of countries defying economic logic in search of other goals. Perhaps they want to improve their national self-reliance in a given product; perhaps they want to ensure certain jobs in cherished areas or industries are protected. But nothing comes for free, and even if Donald Trump‘s tariffs succeed in persuading domestic producers to smelt more aluminium or steel, such things don’t happen overnight. In the short run, it’s hard to see how these tariffs wouldn’t be significantly inflationary.

There’s a deeper issue here, which comes back (as so many of Mr Trump’s economic measures do) to China. Both the steel and aluminium markets have faced enormous influxes of cheap Chinese metals in recent years – to the extent that in recent months those Chinese imports have actually been cheaper than the cost of production in Europe.

To some extent, that’s a consequence of high European energy costs, but it’s partly down to the fact that China subsidises its producers more than most other countries around the world. Indeed, of all the products in the world, few have had as many cases lodged at the World Trade Organisation as steel.

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But while it’s worth being aware of these dynamics, which are pushing cheap steel into many markets, it’s also worth noting that the US actually imports far less from China than you might have thought. The vast majority of American aluminium imports, for instance, come from Canada rather than China. Any tariffs on the metal would further undermine the economic relationship between these parts of North America.

Much, of course, now depends on the structure and detail of these tariffs – and the extent to which they’re actually implemented. As with his threatened tariffs on Canada and Mexico, these ones raise as many questions as they answer. That is likely to be the way of things for much of this presidential term.

Donald Trump says he will impose 25% tariffs on all steel and aluminium imports into the US, including from Canada and Mexico.

The president said he would make the announcement on Monday, signalling yet another major escalation in his trade policy overhaul.

Speaking on Air Force One as he flew from Florida to New Orleans for the Super Bowl, he said the new levies would be on top of existing metals duties.

“Any steel coming into the United States is going to have a 25% tariff,” Mr Trump told reporters on Sunday.

When asked about aluminium, he responded, “aluminium, too” will be subject to the trade penalties.

Share prices in steelmakers in Asia were mostly down on Monday, apart from those with operations in the US.

Mr Trump also said he will announce reciprocal tariffs on Tuesday or Wednesday, to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each nation.

“And very simply, it’s, if they charge us, we charge them,” Mr Trump said of the reciprocal tariff plan.

Australia seeks tariff exemption

Meanwhile, Canberra is pressing Washington for an exemption to the planned tariffs, with Australia’s trade minister Don Farrell saying its steel and aluminium to the US create “thousands of good-paying American jobs” and are key to shared defence interests.

Mr Farrell said his country was making the case for “free and fair trade, including access into the US market for Australian steel and aluminium” during meetings with the Trump administration.

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Mr Trump previously threatened 25% import taxes on all goods from Canada and Mexico, though he paused them for 30 days last week. At the same time, he proceeded to add 10% duties on imports from China.

Also last week, Mr Trump said tariffs on the European Union would be implemented “pretty soon”. When questioned about the UK, the president said Britain was “out of line” when it came to trade but he thought the situation could be “worked out” without the use of tariffs.

His latest comments on the presidential plane came just after German Chancellor Olaf Scholz said the EU was ready to respond “within an hour” if the US levied tariffs on European goods, highlighting the risks of an escalating trade war.

China’s retaliatory tariffs on some US exports are due to take effect on Monday, with no sign yet of progress between Beijing and Washington.

‘Gulf of America Day’

Also on board Air Force One, Mr Trump signed a proclamation declaring 9 February 2025 as the first-ever “Gulf of America Day”.

One of the first executive orders the president signed was renaming the Gulf of Mexico.

While signing the latest proclamation, he posed in front of a map with the newly changed name.

Trump reiterates desire to make Canada 51st state

In a separate interview earlier on Fox News, Mr Trump repeated calls to make Canada “the 51st state” as he reiterated his support for tech billionaire Elon Musk.

When asked if he was serious about Canada being a 51st state, Mr Trump said: “I think Canada would be much better off.

“We lose $200bn a year with Canada. And I’m not going to let that happen. It’s too much.

“Why are we paying $200bn a year essentially in subsidy to Canada? Now, if they are a 51st state, I don’t mind doing it.”

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He also continued to voice support for Mr Musk. The X owner is spearheading the US president’s efforts to cut costs and bureaucracy in government, which has already seen the US Aid Agency for International Development targeted.

Named the Department of Government Efficiency (DOGE), its aim is to find ways to sack federal workers, cut programmes and cut federal regulations.