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Why Trump wants to bring aluminum production back to the U.S.

Issued at 2025-04-15



Americans use a lot of aluminum.

The metal is both lightweight and an effective conductor of electricity, giving it countless applications in transportation and energy systems alongside culinary work and more.

“It really is the magic metal,” said Charles Johnson, president and CEO of the Aluminum Association.

Aluminum is one of 50 “critical minerals” identified by the U.S. Geological Survey. But most production of aluminum occurs in other countries.

The Trump administration would like to bring some of that production into the U.S. Its main policy tool here will be tariffs, which are taxes on imported goods.

Since 2018, the U.S. has levied a 10% tariff on aluminum imports. During the Biden years, various trading partners were exempted from those fees. As a result, the effective rate for aluminum entering the U.S. was just 3.91% in February 2025, according to S&P Global. In March 2025, President Donald Trump raised existing tariffs on steel and aluminum to 25%.

Canada is by far the largest source of U.S. imports of aluminum.

The full price-level effects of these tariffs are unknown and any analysis is subject to revision as trade negotiations unfold. Still, some experts believe that price increases for consumers potentially could be small.

“When you consider a $40,000 car or something like that, it might increase the price by about $75,” said Scott Paul, president at the Alliance for American Manufacturing, an advocacy and lobbying group.

The administration says that these tariffs are necessary to fight trends in the global economy that disadvantage the U.S, primarily the rising importance of China.

“The subsidies allowed China to come in at an artificially low price. And that has roiled the aluminum industry globally and in particular in the United States,” said Paul.

The Aluminum Association, a U.S. organization comprised of industry decision makers, believes that rebuilding domestic smelting capacity could take large provisions of electricity and potentially have a net negative effect on the domestic labor force. In an interview with CNBC, the group also noted that it could take around eight to 10 years to build new industrial facilities like “smelters” which convert alumina into its final, consumer-friendly form.

“In the meantime we will import,” Johnson said.


Source: CNBC



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