US President Trump's tariff policies not only impacted foreign exporters but also harmed US multinational corporations with production sites outside the country. Alcoa, the largest aluminum producer in the US, is one of the "victims."
Since taking office in January this year, Trump has announced a series of tariff policies. Currently, the US imposes a 25% tariff on aluminum imports.
On Wednesday local time, Alcoa stated that due to US tariffs on aluminum imports from Canada, the company lost approximately $20 million in the first quarter ending March 31. The company also expects
that losses in the current quarter (Q2) will reach around $90 million.
"About 70% of the aluminum we produce in Canada is shipped to the US, and now it is subject to a 25% tariff," Alcoa CEO William Oplinger said during an earnings call on Wednesday.
Alcoa sources some of its raw materials from Chinese suppliers. The company anticipates that hefty US tariffs on China will increase its annual costs by $10 million to $15 million due to the lack of suitable alternative suppliers.
Alcoa is headquartered in Pittsburgh and produces aluminum not only in the US but also in Canada, Iceland, Australia, and other locations.
According to US Department of Commerce data, Canada is the largest source of US aluminum imports, exporting $11 billion worth of primary aluminum and aluminum products to the US last year. In total, the US imported $27 billion worth of aluminum last year, with other sources including China, Mexico, and others.
Trump's aluminum tariffs aim to boost US aluminum production. Data shows that last year, US smelters produced only 670,000 mt of aluminum, compared to 3.7 million mt in 2000. In recent years, smelters in various parts of the US, including Kentucky and Missouri, have shut down, making the country heavily reliant on aluminum imports to meet domestic demand.
Speaking about the current US capacity, Oplinger said on Wednesday, "Even if all idle smelting capacity is restarted, the US will still face a 3.6 million mt aluminum shortfall." He also stated, "Until additional smelting capacity is built in the US, the most efficient aluminum supply chain is to continue allowing Canadian aluminum to flow into the US."
At the end of February this year, Alcoa warned that Trump's tariffs on aluminum imports could lead to the loss of about 100,000 jobs in the US and would not increase US aluminum production.
