U.S. President Donald Trump’s decision to impose a 25% tariff on aluminum imports, including those from Canada, sets the stage for ongoing trade disputes that continue to impact the industry. As aluminum remains a critical material for sectors like automotive and infrastructure, recent policy debates over tariffs, supply chains and domestic production underscore the lasting effects of Trump’s trade strategy.
It’s great that the aluminum industry is getting the attention it's due. Aluminum is an important resource that is high in demand in the United States. However, if we really want to turn around the aluminum industry, we need to look at the largest source of its costs: its energy source.
As background, the U.S.’ aluminum industry mainly produces recycled aluminum, not primary aluminum (the kind made from raw ore, not recycled aluminum). Yet, primary aluminum is essential to daily life — it’s the metal that manufacturers use to make cars, beverage cans, electronics, appliances and much more.
Here’s the reality:
- Canada supplies approximately 60% of the primary aluminum used by the U.S.
- Canada also supplies 58% of all aluminum imports into the U.S.
- The U.S. domestic primary aluminum industry does not, and cannot, produce enough to meet demand, making Canadian and other imports crucial.
While aluminum industry producers have multiple opinions on tariffs, we know that the effect will be higher prices on things like beer and soda cans, cars and electronics. Some producers argue that higher prices to consumers will shift people to buy locally, while others say that high prices will turn consumers away from aluminum altogether.
But we’ve been here before. The previous Trump administration levied Section 232 tariffs on aluminum in 2018. The tariffs were meant to help the industry, but they didn’t stop the overall downturn.
In 2018, the U.S. had seven primary aluminum smelters. Since then, three have closed or curtailed operations — Alcoa’s Intalco smelter in Washington in 2020, Century’s Hawesville facility in Kentucky in 2022 and Magnitude 7 Metals facility in Missouri in 2024. Today, only four remain, located in Kentucky, Indiana, South Carolina, and New York.
The real solution to reviving the U.S. aluminum industry isn’t tariffs — it’s electricity.
Primary aluminum production is incredibly energy-intensive, and electricity is by far the largest cost for a primary aluminum producer. Currently, electricity costs make up 40% of primary aluminum production costs.
The very little U.S.-produced primary aluminum is made with high-carbon energy sources like coal and natural gas for electricity — and primary aluminum requires a lot of electricity. By contrast, Canadian aluminum is primarily produced using zero-emission hydroelectric power, making it far more environmentally friendly and cost-effective. Manufacturers have been clamoring for a domestic supply of low-carbon primary aluminum, and this need will only get more acute with these new tariffs.
Globally, governments support producers by ensuring access to affordable, stable electricity. In the U.S., reliance on volatile electricity markets and expensive fossil fuels has left our domestic industry in the dire position it is in today.
If our government wants to boost domestic aluminum production, they should focus on energy solutions, not tariffs that raise costs for consumers and businesses.
