There are expectations among market participants that the 25% tariff imposed by United States President Donald Trump on imports of steel and aluminium from all countries, which kicked in on March 12, will impact industries that are reliant on aluminium, ranging from food packaging to aerospace, sources told Fastmarkets.
“Whether you are an extruder or a sheet products producer, [you will be affected]. The tariff, as we all know, ends up being imposed in the cost of the metal. So, there is no bill going to somebody [in particular], it is in the metal, and the cost of the metal goes up,” a US aluminium market participant said.
The tariffs cover unwrought aluminium, aluminium bars, rods, tubes, structures, and profiles, aluminium wire, plates, sheets and strip, and aluminium foil.
The US imported more than 2.74 million tonnes of unwrought aluminium from Canada in 2024, which accounts for 75.70% of its over 3.62 million tonnes of total unwrought aluminium imports, according to data from the United States International Trade Commission (USITC).
The US also imported 86,128 tonnes of aluminium bar, rod, and profiles, 191,237 tonnes of aluminium wire, and 126,483 tonnes of aluminium sheet thicker than 0.2mm from its northern neighbor in the same year.
Aluminium bars, rods and profiles are used in construction and for structural components, while aluminium wire is used in electric systems and grid, and aluminium sheet is used in construction, automotive, and industrial applications.
The tariffs are also imposed on manufactured goods, such as nails, tacks, staples, and screws.
Beverage cans
There are concerns among industry participants that the aluminium tariffs may raise the costs of beverage cans, which could lead to consumer prices being raised, sources said.
“The real worry is whether that cost becomes too difficult to handle versus the alternatives [to aluminium,]” a consumer source said, adding that he heard that some producers were considering a return to the use of more plastic in soda beverages if the cost of aluminium cans become too much.
“Or they will absorb the cost and pass it along to the [end] consumer,” the consumer source added.
“While we support President Donald Trump’s efforts to address unfair trade practices, tariffs on steel and aluminium will increase prices for canned foods and beverages. Consumers will feel the inflationary impact of these tariffs at the grocery store,” the Can Manufacturers Institute president Robert Budway said in a statement on March 12.
Budway added that recent history demonstrated that protectionist trade measures have had “serious impacts” on the US economy.
“Aluminium and steel tariffs place price pressures on American-produced goods by artificially and dramatically increasing the cost of critical production materials, making U.S.-made food less competitive against foreign products,” Budway said.
Aluminium cans are one of the most recycled consumer products in the US, with the consumer recycling rate for aluminium beverage cans in the US standing at 43%, according to a December 2024 report by the Aluminum Association and the Can Manufacturers Institute.
But primary aluminium is still needed in new aluminium can production. Each beverage can uses 53% post-consumer scrap and 18% post-industrial scrap but the remaining comes from primary aluminium, according to the same report.
Autos
One of the biggest consumers of aluminium in the US are auto-manufacturers. Aluminium is used in body parts, chassis, wheels, roof-racks, transmissions, engine blocks, suspension, breaks, electric wiring, air conditioning components, interior trim and radiators.
“What will these auto companies do? Will they pass these costs to consumers buying cars? Cars are already expensive today so [I am] not sure whether they will be able to do that,” a US-based aluminium consumer source said.
Electric vehicles (EVs) use a substantial amount of the light metal to extend battery range and counteract the weight of EV batteries, according to industry sources.
According to a 2023 study conducted by Ducker Carlisle for the Aluminum Association, an EV in 2022 had an average aluminium content of 885 pounds per vehicle (ppv,) 85% more than non-EV vehicles.
Construction
The tariff could also raise residential construction costs. The tariffs are projected to add layered costs that could impact builders’ ability to construct single-family and multifamily housing projects, according to a release by the National Association of Home Builders’ (NAHB) release on February 12.
Aluminium is used in building construction, in areas like external siding materials, roofing materials, walls, window frames, gutters, downspouts, doors, railing, shelving and other applications. The light, durable metal is also used in the construction of commercial buildings and skyscrapers.
“The global tariffs on steel and aluminium are counterproductive to help ease rising home building costs that make housing more expensive for American home buyers and renters,” NAHB chair Buddy Hughes said in a statement to Fastmarkets.
“Through an executive order on his first day in office, President Trump made it a top priority to reduce housing costs and increase housing supply to ease the nation’s housing affordability crisis. These new tariffs run totally counter to this goal by raising construction costs and deterring new development,” Hughes said.
“As we enter the crucial spring home buying season, NAHB will continue to work with the administration to remove regulatory and other barriers that are the main drivers of low housing supply and high home prices,” Hughes added.
“Ultimately, consumers will pay for these tariffs in the form of higher home prices,” the association’s former chair Carl Harris said in the NAHB release.
According to a NAHB/Wells Fargo Housing Market Index (HMI), builder confidence in the newly built single-family housing market fell three points from February to March, marking the lowest level in seven months.
The HMI measures “the pulse of the single-family housing market” based on monthly surveys of builders. The NAHB cited economic uncertainty, tariff threats and elevated construction costs in a March 17 article.
“Construction firms are facing added cost pressures from tariffs. Data from the HMI March survey reveals that builders estimate a typical cost effect from recent tariff actions at $9,200 per home,” NAHB Chief Economist Robert Dietz said.
“Uncertainty on policy is also having a negative impact on home buyers and development decisions,” Dietz added.
Exports
In a letter addressed to the US Trade Representative (USTR) Ambassador Jamieson Greer on March 11, and published on USTR’s website, EV manufacturer Tesla drew attention to yet another aspect of tariffs that could affect the US automotive industry.
“As a US manufacturer and exporter, Tesla encourages USTR to consider the downstream impacts of certain proposed actions taken to address unfair trade practices,” the letter read, adding that such trade actions should also consider exports from the United States.
“Past US special tariff actions have thus (1) increased costs to Tesla for vehicles manufactured in the United States, and (2) increased costs for those same vehicles when exported from the United States, resulting in less competitive international marketplace for U.S. manufacturers. USTR should investigate ways to avoid these pitfalls in future actions,” according to the letter.
However, this effect is not limited to EV manufacturers but will affect all producers that use primary aluminium in their products, sources said.
“Let’s say you are a manufacturer of a widget in the US and export your product. You will be uncompetitive in the world, because you will have higher prices due to the cost of your widget. And you won’t be competitive globally because [the other producers in the world] will have lower metal costs,” the US-based aluminium consumer said.
Aerospace
High quality and high purity aluminium is also required by the aerospace industry to manufacture lightweight aircraft and ensure durability, according to industry sources.
Known for their high strength-to-weight ratios, the aerospace industry uses 6061, 6065, and 7075 aluminium alloys – all of which require primary aluminium with minimal impurities as their raw material, sources said.
But almost all of this comes from Canada, according to an aerospace industry participant, who said he was concerned that he will need to pay a considerably higher price for the high-purity material he needs.
The Aluminum Association
The Aluminum Association, which is a trade association representing the industry, welcomed the 25% tariff on foreign aluminium, while also calling for tariff-free access to the Canadian market.
“There’s a lot we support in the president’s Section 232 action. Now, to drive the industry’s growth and support the president’s national security aims, we need increased market certainty and tariff-free access to aluminium from Canada,” the Aluminum Association’s president and chief executive officer Charles Johnson told Fastmarkets in a statement.
“Since 2016, the US aluminium industry has invested more than $10 billion in domestic operations to meet growing consumer and customer demand for durable, energy efficient aluminium,” Johnson said.
“With steady demand, ongoing capital investment and job growth, now is the time to ensure the US industry has access to a reliable supply of affordable metal and certainty in the tariff landscape. Doing so is good for the economy, the environment and national defense,” Johnson added.
The Aluminum Association also said a statement on March 12, that as the US invests in domestic smelters, importing aluminium is necessary in the “years if not decades” it will take to build US capacity.
“At the same time, the industry’s decades-long trading relationship with Canada is a good deal for America. The aluminium we import from Canada today is equivalent to the energy generated by at least [four] Hoover Dams. And just one Canadian smelter job supports about 13 US aluminium jobs further downstream,” the association said.
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