US Aluminum Association says 50% tariffs 'threatens to undermine domestic sector'

In its strongest rebuke of US President Donald Trump's trade policy to date, the Aluminum Association said in a statement that a 50% tariff on aluminum imports would damage the US sector.

After the US government implemented 25% tariffs on all aluminum imports on March 12, the association representing US aluminum producers and manufacturers emphasized that the import-reliant US industry needs affordable, duty-free metal from trusted trade partners, especially Canada. Canada supplies about two-thirds of all primary aluminum consumed by the US, according to the Association. Trump's subsequent doubling of duties on aluminum imports, effective June 4, would ratchet up input costs for aluminum manufacturers across the country.

"Re-establishing a more level playing field for domestic producers is critical, but a Section 232 tariff of 50% threatens to undermine the very industry the administration aims to support," said President and CEO Charles Johnson in a June 4 statement. "The Aluminum Association, which represents the full industry supply chain and 70% of domestic production, urges the administration to reconsider today's decision given the negative impact it will have on manufacturers."

Trump's aluminum duties are Section 232 tariffs, which are named for the section of trade law that authorizes them on national security grounds.

Platts, part of S&P Global Energy, assessed spot 99.7% P1020 US Aluminum Transaction Premium at 58.55 cents/lb plus LME cash, delivered Midwest, net-30-day payment terms, on June 4.

This assessment, also known as the Midwest Premium, is currently at a record high and has risen 150.7% since the start of the year. The dramatic price surge may lead to demand destruction for aluminum in the US.

"A 50% tariff rate could also raise prices for consumers, decrease demand and undermine the aluminum industry's ability to serve the US defense industrial base," Johnson said. "Aluminum firms need a reliable supply of metal, protection from transshipped metal from non-market economies, and certainty in the tariff landscape."