Report: The United States will halve aluminum tariffs for companies building factories in the US

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To compensate for the insufficient domestic primary aluminum production capacity, the United States has introduced a new tariff concession policy.

According to CCTV News, on July 20 local time, the White House issued a statement announcing that President Trump signed a proclamation that day, providing tariff concessions on imported primary aluminum to enterprises investing in aluminum production projects in the United States, based on Section 232 of the Trade Expansion Act of 1962 and other legal provisions.

The core of the plan is: Any company that builds, expands, or renovates an aluminum smelter in the U.S. and obtains government approval will see the tariff on aluminum imported from abroad reduced from the current 50% to about 25%. Eligible projects must commit to starting construction by January 20, 2029.

Before the policy was announced, London aluminum closed slightly lower at $3,140; as of press time, it had rebounded 0.66% to $3,160.76. Due to tariffs and the Middle East conflict, the U.S. Midwest aluminum premium has nearly doubled, putting American manufacturers under the highest raw material cost pressure in the world.

Limited Effect of Tariff Increases; U.S. Aluminum Industry Faces “High Import Dependence” Dilemma

According to CCTV News, last June, the U.S. raised tariffs on steel and aluminum products imported from all trade partners except the UK from 25% to 50%. In April and June this year, the U.S. issued policies to weaken the tariff strength for steel and aluminum.

Analysis points out, the U.S. government originally hoped that the 50% steel and aluminum tariffs would boost domestic capacity, but the result has been limited. U.S. primary aluminum capacity is insufficient and heavily dependent on imports from Canada and the Middle East to meet domestic demand.

Persistently high aluminum prices have had a profound impact on downstream U.S. manufacturing. Manufacturers in industries such as appliances, beverage cans, and automobiles are facing the highest raw material costs globally, and are generally turning to a “just-in-time” procurement model—maintaining only the minimum inventory needed for current production to avoid price fluctuation risks.

Since the beginning of this year, aluminum prices on the London Metal Exchange have continued to rise due to the dual impact of tariffs and supply shortages. Although the new incentive plan, if it succeeds in attracting substantial corporate investment in building plants, may ease supply tensions in the medium to long term, in the short run the structural supply-demand gap in the U.S. aluminum market remains difficult to quickly bridge.

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