Washington, May 20, 2024- The US government recently announced that it will increase tariffs on some imported aluminum profiles from 10% to 25% to protect domestic manufacturing and address "unfair trade practices". This policy mainly targets major aluminum exporting countries such as China and Mexico, and is expected to affect the global supply chain and may push up production costs for downstream industries in the United States.

Background of the New Tariff Policy

The Office of the United States Trade Representative (USTR) stated that the imposition of tariffs this time is based on the results of the "301 investigation", which believes that some countries have engaged in dumping and government subsidies of aluminum profiles, which have harmed the domestic industries in the United States. The new tariffs cover aluminum profiles for construction, industrial aluminum, and some high value-added products, and are expected to take effect on July 1, 2024.  

The Aluminum Association supports this decision, stating that it helps to "maintain a fair competitive environment". However, the Auto Alliance and the Solar Energy Industry Association (SEIA) have warned that this move could lead to increased costs for products such as electric vehicles and photovoltaic brackets, affecting the clean energy transition process in the United States.

Global market response:

1.  China: Or take countermeasures

China is the world's largest producer and exporter of aluminum profiles, with the US market accounting for approximately 15% of its exports. The spokesperson of the Chinese Ministry of Commerce responded that the US move "violates international trade rules", and China will take necessary measures to safeguard the rights and interests of enterprises. Industry analysis suggests that China may retaliate by increasing import tariffs on some US goods or filing lawsuits with the World Trade Organization (WTO).  

2.  Europe and Southeast Asia seek alternative markets

Some European aluminum companies are considering increasing exports to the United States to fill the gap in Chinese products. Meanwhile, aluminum profile manufacturers from Southeast Asian countries such as Vietnam and Malaysia may benefit as their export tariffs to the United States remain at a relatively low level.

3.  Downstream industries in the United States are under pressure** Due to limited production capacity of aluminum profiles in the United States, the construction, automotive, and new energy industries rely on imports. Industry analysts predict that the new tariffs may lead to a 10% -20% increase in aluminum profile prices, which will ultimately be passed on to consumers. Tesla, Ford and other car companies have stated that they are evaluating supply chain adjustment plans and may turn to Mexico or Canada for procurement to reduce costs.

Future impact and industry response:Experts point out that this tariff adjustment may accelerate the regionalization trend of the global aluminum industry chain. Chinese companies may increase their production capacity layout in Southeast Asia and Mexico, and avoid high tariffs through third-party transit. In addition, the rapid increase in domestic aluminum profile production capacity in the United States will be the key to alleviating supply chain pressure.