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

Published: Feb 15, 2025 17:14

Save

[SMM Analysis: Limited Impact of US 25% Tariff Increase, Rising Risks in Aluminum Plate/Sheet, Strip and Foil Re-Export] The US's imposition of a 25% tariff 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 enterprises need to continuously assess the feasibility of re-export routes while accelerating the development of diversified export markets to reduce dependence on the US.

》View SMM Aluminum Product Prices, Data, and Market Analysis

》Subscribe to Access SMM Historical Spot Metal Prices

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.

》Click to Access the SMM Aluminum Industry Chain Database

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

36 mins ago

Fed Governor Milan Pushes for Over 100 Basis Points Cut, Contradicts Barkin on Caution

Federal Reserve Governor Milan pointed out that it is necessary for the US Fed to cut interest rates by more than 100 basis points this year. At the same time, he is very much looking forward to the performance of Kevin Warsh as Fed Chairman. However, Richmond Fed President Barkin emphasized that monetary policy must remain cautious until inflation fully pulls back to the target level, thereby ensuring the stability of the labour market.

36 mins ago

38 mins ago

Democratic Senators Demand Delay in Fed Nomination Amid Criminal Investigation

All 11 Democratic members of the US Senate Banking Committee jointly sent a letter to the committee's chairman, Tim Scott, requesting that all nomination processes for the prospective Fed Chairman, Kevin Warsh, be postponed until the criminal investigation into current Fed Chairman Powell and other board members is concluded. However, Scott stated that Warsh's confirmation was a done deal.

38 mins ago

Fed to Keep Large Banks' Capital Levels Unchanged, Postpones Stress Test Reforms Until 2027

The US Fed has announced that it will maintain the capital levels of large banks unchanged during the upcoming stress test cycle (corresponding to the 2026 cycle). At the same time, the US Fed is planning multidimensional reforms to this annual test, aiming to enhance its transparency. The US Fed's Vice Chair for Supervision, Bowman, revealed that adjustments to the stress capital buffer requirements for large banks will be postponed until 2027. This move is intended to provide the US Fed with sufficient time to evaluate potential flaws that may be exposed in its testing models when assessing banks' financial conditions under simulated economic downturn scenarios.

38 mins ago