All eyes on ‘high stakes’ North America trade talks as US aluminum sector begins Q4

US aluminum industry leaders are closely watching trade talks with Canada and Mexico, as negotiations could lead to major changes in pricing and trade flows.

The US decision not to renew the United States-Mexico-Canada Agreement trade pact in July has led to intense negotiations between the US and its two largest trading partners. The US is heavily reliant on primary aluminum supply from Canada, and 90% of the aluminum scrap imported to support US manufacturers comes from Canada and Mexico, according to the US-based Aluminum Association trade group. Industry leaders say changes to US trade relations with either country have the potential to significantly revamp the tightly integrated North American aluminum industry.

"The [North America] trade talks are very high stakes," Jake Skelton, CEO of EGA Americas Inc., a subsidiary of aluminum producer Emirates Global Aluminum PJSC, told Platts, part of S&P Global Energy, in an interview. "Any kind of reduction to the current tariff rates for either Mexico or Canada will have a profound impact on demand for their aluminum and on US manufacturers."

Canada accounted for 60.5% of US primary aluminum imports in 2025, according to S&P Global Market Intelligence's Global Trade Atlas, a period which included six months of a US 50% tariff on aluminum.

Canada diverted some shipments toward European customers in the wake of the new duties, and thesituation fueled record-high prices in US aluminum as well as historically tight supply conditions.

"US-Canada trade talks in particular are top of mind," Duncan Pitchford president of Norsk Hydro ASA's US aluminum operations, told Platts. "That's primarily because of the amount of aluminum production in Canada. A changed tariff regime towards Canada could result in changes in metal flow, and changes in pricing, especially the Midwest [Premium]."

Platts assessed the spot 99.7% P1020 US Aluminum Transaction Premium at $1.087/pound plus LME cash, delivered Midwest, net 30-day payment terms, on Sept. 28.

The assessment, known as the Midwest Premium, is over four times higher than it was at the start of 2025, primarily due to the tariff and the attacks on Middle Eastern producers in the course of a war between Iran and the US and Israel.

"Our base view remains that a deal to reduce US tariffs on Canadian aluminum is still in the offing ahead of the midterm elections," said S&P Global Energy Horizons aluminum analysts in a Sept. 28 report. "Recent reports suggest that about 70,000 mt of metal shipped to the EU is being held back in anticipation of such a move."

Mexico deal 'biggest threat' for some US extruders

Other industry leaders, however, said that US negotiations with Mexico could be more consequential for some in the US aluminum sector, especially extruders.

"The trade talks with Mexico are going to affect me a lot more than the Canadian ones," Mark McClelland, president of Texas-based Tower Extrusions LLC, told Platts. "If they lower tariffs on Mexico, non-market economy type metal can find its way into the US. So to me, that's actually our biggest threat, from an extruder standpoint."

The Washington, DC-based Aluminum Association has highlighted challenges with aluminum from China circumventing US tariffs and trade regulations through transshipment through Mexico.

One of the trade group's main asks of the US government has been to strengthen trade cooperation with Mexico to prevent the import of unfairly traded metal.

"US-Mexico [negotiations] probably has a greater effect on our business than anything else I can think of right now," McClelland said. "A bad trade deal could wipe out a lot of [US] companies."

In response to US concerns, Mexico published a new aluminum import monitoring system on April 2.

"This measure increases traceability requirements for aluminum entering Mexico and supports efforts to address possible third-country transshipment," the US International Trade Administration said in an April 14 statement.

Aluminum buyers struggle amid trade talks

As the aluminum sector awaits the results of US negotiations with Mexico and Canada, experts noted that the murky trade picture has led to challenging conditions as aluminum buyers look to secure supply.

"Some people take the approach of, 'Well, uncertainty is here to stay,' and they sign a deal that reflects potential uncertainty and move on," said Norsk Hydro's Pitchford. "Others may take the approach of, 'No, I need to wait and see, I'm going to let the clock run a little bit longer.' I think in the market right now, you see a combination of that going on."

Gerrit Reepmeyer, a partner in the automotive and industrial practice at global consulting firm AlixPartners LLP, told Platts that leaders in the automotive industry are spending much more time navigating metals markets due to sky-high prices and volatility.

"Metal buying is not normally top of mind for auto companies, but now they're feeling the pain, and it's getting a lot of attention," said Reepmeyer. "For example, we saw clients layering a hedge in February because they thought, 'I'll lock in that price for three months and hope it comes down.' Three months later, when they had to buy more, the prices were even higher and kept increasing. Some hedge, some delay purchases, everyone is trying to figure out how to protect themselves."