On March 8, President Trump tweeted that “Aluminum prices are down 12% since I instituted Tariffs on Aluminum Dumping – and the U.S. will be taking in Billions, plus jobs. Nice!” Last year, President Trump tweeted that aluminum prices fell after the tariffs. However, President Trump imposed sanctions on RUSAL, the leading Russian aluminum producer, which propelled aluminum prices (SPY) to multiyear highs.
Lower aluminum prices probably won’t bring smiles to US aluminum companies. Last year, Century Aluminum (CENX) restarted a smelter after the tariffs. The company posted a net loss in 2018 amid lower aluminum and higher alumina prices. The “billions” collected came from aluminum end users. Even Alcoa (AA), the leading US-based aluminum producer, is paying tariffs on the aluminum it ships from its Canadian smelters. While US physical delivery premiums have risen, they haven’t been enough to offset the sharp fall in aluminum prices. US aluminum producers haven’t benefited much from the tariffs.
On the downstream side, automotive companies like Ford (F), General Motors (GM), and Tesla (TSLA) have seen rising costs after the Section 232 steel and aluminum tariffs. There have been job losses in the automotive sector. Automotive companies have been tightening their belts amid stagnant vehicle sales.
While steel tariffs have enabled companies to double down on their investment and growth plans, aluminum companies haven’t looked at investing in new plants. Read A Year of Trump’s Metal Tariffs: A Look at the Gains and Losses to learn more.