US Imposes 25% Tariff with Limited Impact; Risks of Aluminum Plate/Sheet, Strip and Foil Export and Re-export Rise [SMM Analysis]

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SMM February 15 News

On February 10 local time, US President Trump signed an executive order announcing a 25% tariff hike on all aluminum and steel imports to the US. Trump also stated on the same day that the measure would have "no exceptions or exemptions" and that future tariffs on automobiles, chips, and pharmaceuticals would be considered.

As aluminum plate/sheet, strip and foil are an important part of China's aluminum processing product exports, how will this US tariff hike impact the domestic aluminum plate/sheet, strip and foil market?

According to data from the General Administration of Customs, in 2024, China exported a total of 235,000 mt of aluminum plate/sheet, strip and foil to the US, including 161,000 mt of aluminum plate/sheet and strip and 74,000 mt of aluminum foil. In 2024, China's total annual export volume of aluminum plate/sheet, strip and foil was 4.981 million mt, including 3.425 million mt of aluminum plate/sheet and strip and 1.555 million mt of aluminum foil. From a proportion perspective, the volume directly exported from China to the US accounted for only about 4.7% of the total. Therefore, based on the volume and proportion of China's direct exports to the US, the impact of this US tariff hike on the overall export situation of China's aluminum plate/sheet, strip and foil is relatively limited.

In addition to China's direct exports to the US, attention should also be paid to indirect exports entering the US via other countries. According to SMM, for some tariff codes, the cost of directly exporting aluminum plate/sheet, strip and foil to the US is too high. Domestic companies opt to first export to aluminum deep-processing plants in Mexico or Canada for further processing, with the finished products then entering the US market.

Trump stated that the 25% tariff would have "no exceptions or exemptions," and as major suppliers of aluminum semis, Canada and Mexico are significantly affected. Related companies have reported that, going forward, attention will focus on whether aluminum plate/sheet, strip and foil products under certain tariff codes entering the US via Canada and Mexico will also be subject to the tariff hike. If developments fall short of expectations, companies may be forced to abandon part of the US market due to high export costs and instead seek other opportunities to absorb domestic capacity.

In summary, the US's comprehensive 25% tariff hike on imported aluminum and steel has a relatively limited direct impact on China's aluminum plate/sheet, strip and foil market. However, attention should be paid to the risks of indirect re-export trade. Relevant domestic companies need to continuously assess the feasibility of re-export routes and accelerate the diversification of export markets to reduce dependence on the US.

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