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Aluminium premiums for US buyers hit record after Trump doubles tariffs
Published by Global Banking & Finance Review®
Posted on March 11, 2025
3 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on March 11, 2025
3 min readLast updated: January 24, 2026
US aluminium premiums hit record highs after Trump doubles tariffs on Canadian metal, affecting transport and construction industries.
By Pratima Desai
LONDON (Reuters) -Premiums for consumers buying aluminium on the physical market in the United States soared to record highs on Tuesday after President Donald Trump said he would double tariffs on Canadian metal to 50%.
The doubling of levies, in response to the Canadian province of Ontario placing a 25% tariff on electricity coming into the U.S., take effect from Wednesday.
Consumers buying aluminium on the physical market typically pay the London Metal Exchange (LME) benchmark aluminium price plus a premium that covers taxes, transport and handling costs.
Traders predict premiums will continue to rise as producers pass on as much of the extra costs of tariffs as they can.
Canadian smelters account for most primary and alloyed aluminium shipped to the United States. Aluminium is vital for the transport, packaging and construction industries.
About 70%, or 3.92 million metric tons of the primary and alloyed aluminium exported to the United States last year, came from Canada, according to information provider Trade Data Monitor (TDM).
The 25% tariff originally planned would have meant the premium would have had to rise to 47 cents a lb or more than $1,000 a ton to cover the extra costs for sellers, analysts have calculated.
The U.S. Midwest duty-paid aluminium premium jumped to 45 U.S. cents per lb, or more than $990 a metric ton, on Tuesday, a jump of nearly 20% from Monday. It has climbed more than 70% since the start of 2025.
During his previous presidency, Trump in 2018 sought to use tariffs on aluminium to encourage investment in capacity.
Given that aluminium smelters take longer to build than political election cycles, analysts were sceptical investors would be confident to spend the large capital sums needed.
"U.S. primary aluminium production has experienced a sequential decline over the past two decades due to often thin or negative margins, and the implementation of tariffs in 2018 has not sustainably helped local supply to recover," Macquarie analysts said in a note last month.
While premiums for U.S. buyers have risen, industry sources have said they are likely to continue falling elsewhere as aluminium produced in countries where import levies apply are diverted.
In Europe, the duty-paid physical market premium has dropped to $240 a metric ton, the lowest since January last year. It has fallen more than 35% since the start of 2025.
(Reporting by Pratima DesaiEditing by Eric Onstad, David Goodman and Barbara Lewis)
The increase in aluminium premiums for US buyers was caused by President Trump's decision to double tariffs on Canadian aluminium imports in response to Ontario's electricity tariffs.
The U.S. Midwest duty-paid aluminium premium jumped to 45 U.S. cents per lb, which is over $990 a metric ton, marking a nearly 20% increase from the previous day.
About 70%, or 3.92 million metric tons, of the primary and alloyed aluminium exported to the United States last year came from Canada.
US primary aluminium production has been in decline over the past two decades, and while tariffs were implemented in 2018, they have not led to sustainable growth in production capacity.
In Europe, the duty-paid physical market premium has dropped to $240 a metric ton, which is the lowest since January last year, falling more than 35% since the start of 2025.
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