Alcoa CEO: Tariffs Would Decimate Aluminum Sector, Not Protect It
Alcoa, a metals producer that many assume would benefit from President Donald Trump's proposed 25% tariff on imported aluminum, hates that idea. The company's president and CEO said Tuesday that tariffs on Canadian aluminum would lead to the loss of 20,000 jobs in the sector as well as another 80,000 jobs being lost indirectly.
Speaking to the 2025 BMO Global Metals, Mining & Critical Minerals Conference being held in South Florida, Bill Oplinger said that the Trump administration following through with its plan to impose steep tariffs on steel and aluminum products would be a clear negative for the sector. That stance sets him apart from leading steel executives such Nucor Corp.’s Leon Topalian and Cleveland-Cliffs Inc.’s Lourenco Goncalves, who have said the trade measures would level the global playing field.
“We’re clearly advocating based on the fact that this is bad for the aluminum industry in the U.S., it's bad for American workers,” Oplinger said. “We’re advocating with the administration to, at a minimum, get a Canadian exemption.”
Losing 20,000 direct jobs would shrink the U.S. aluminum industry by an eighth: A study released last year by The Aluminum Association said producers directly employ 164,000 workers—a number that had fallen only slightly since 2013. The estimated indirect job losses of 80,000 would amount to a roughly similar share of the nearly 700,000 jobs the study said are supported by the aluminum sector.
Oplinger said the Alcoa team’s estimate of job losses is based on a 25% rate for Canadian products, of which Alcoa ships roughly 700,000 tonnes annually to the United States. (While the planned tariffs would also apply to Mexican steel and aluminum, Oplinger noted that Canadian imports are far larger.) But he added that Alcoa’s leaders also expect that a planned 10% tariff on energy and critical minerals would also apply to their products.
“Those two tariffs would stack for a 35% net tariff coming from Canada,” he said. “We think that’s a particularly bad outcome.”
In addition to the possible job losses, Oplinger said—as he did on Alcoa’s quarterly earnings conference call last month—that the repercussions also could skew global flows of aluminum and raise prices. Tariffs would lead companies to ship Canadian product to Europe while Asian producers could be incentivized to ship finished aluminum good and components to the United States—creating the rather absurd prospect of ships carrying the same product passing each other somewhere in the Atlantic Ocean.
Asked by BMO analyst Katja Jancic if Alcoa would restart idled capacity in the United States should the tariffs last longer than most observers are predicting today, Oplinger was clear. His team would “run the sums” on bringing back some “very old, very inefficient capacity” at its Warrick plant in Indiana but added that another factor is far more important than tariffs in deciding about future projects.
“We would not be making investment in the United States based on a tariff structure that could be in place for a shorter—a much shorter period of time,” he said. “If we were to be able to find cheap, low-cost energy in the U.S., then we would actually consider an investment in the U.S. But it has to be energy for a very long period of time.”
Shares of Alcoa (Ticker: AA) fell nearly 2% to $34.37 on Feb. 25. They are essentially flat over the past six months, leaving the company’s market capitalization at nearly $9 billion.
