Written by Matt Meenan, Vice President of External Affairs, The Aluminum Association
Aluminum keeps America’s factories moving, from beverage cans to cars to aircraft. The path this metal takes — how it’s sourced, melted and delivered into U.S. products — underscores the benefits and challenges of global trade. An early bellwether of trade policy shifts ever more acute in President Trump’s second term, the U.S. industry has been subject to some form of near-universal Section 232 aluminum tariff since 2018.
Understanding the aluminum trade landscape is instructive to understanding broader trade and tariff trends impacting American manufacturers, importers and exporters.
The Modern Aluminum Market: Where We Stand
The U.S. aluminum market is big and always changing. In 2024, North American demand for aluminum products hit nearly 27 billion pounds, approaching pre-COVID record levels. Overall, demand is up around 40% from the nadir of the financial crisis in 2009. Growth is driven by cars, defense, infrastructure and packaging. Aluminum stands out because it’s light, tough and easy to recycle. Still, the market faces real challenges. Recent numbers show a 4.4% drop in North American aluminum demand through the first half of 2025. While it is difficult to say how much (if any) of this decline is driven by trade and tariff policy, potential demand destruction at current tariff levels is a real concern.
From Ore to Product: Sourcing and Melting Aluminum
Aluminum’s story starts far from U.S. soil. The United States has no commercial bauxite mining meaning that we import bauxite and alumina — mostly from Australia, Brazil and Jamaica. Once here, these materials go to smelters to make new, or “primary” aluminum. Most smelting capacity in North America is located in Canada, which enjoys access to an abundance of hydroelectric power particularly in the Quebec region. A smelter uses huge amounts of electricity to turn alumina into primary aluminum — about the equivalent of a major American city like Nashville or Boston.
In the past, the U.S. aluminum industry was a primary producing powerhouse, hosting nearly 30 smelters and leading global production. Today, the United States has 4 remaining operating smelters that can only meet around one-third of U.S. demand even operating at full capacity. A combination of population trends, shifts in American energy policy and subsidized overcapacity (particularly in China) drove this decline. There are attempts underway to rebuild the American smelter base but that is a years-if-not-decades long effort that will require significant capital investment and (perhaps most importantly) shifts in energy policy to see to fruition. In the meantime, the United States will import a large amount of its upstream, primary aluminum to keep up with current (to say nothing of future) demand.
But primary aluminum is just one part of the story. Today, about 85% of U.S. aluminum production involves making recycled or “secondary” aluminum which relies heavily on aluminum scrap material as an essential input. Old cans, car parts, building scrap and more are mixed and melted (typically with some amount of primary aluminum) to create new products. Recycling aluminum saves up to 95% of the energy needed to produce new aluminum. This secondary aluminum is a win-win product that simultaneously saves energy, reduces environmental impact and supports the bottom line for American manufacturers.
Casting, Rolling and Delivery: The Value Chain at Work
After melting, aluminum is cast into shapes like ingots, billets or slabs. These get rolled, extruded or forged into things like car hoods, can sheet and window frames. The U.S. has a strong network of rolling mills and fabricators. Since 2016, more than $11 billion has gone into new rolling mills and recycling plants to meet demand for the lightweight, strong, recyclable products made with aluminum.
Indeed, as the primary aluminum segment has declined, U.S. aluminum jobs in recycling and processing have only grown, netting out to a steady employment picture over the past decade.
But every value chain has weak spots. Steady access to affordable scrap and primary metal is key. When supply dips or costs jump, manufacturers feel it.
Trade Policy: Tariffs, Deals, and Uncertainty
You can’t talk about aluminum without talking trade policy. In 2018, the United States applied a 10% tariff on most aluminum imports into the United States under authority derived under Section 232 of the Trade Expansion Act of 1962. This policy largely held steady (with some significant carveouts and revisions) until this year when the rate was increased to 25% in March and then 50% in June. The goal of the tariffs is to protect U.S. producers and address national security concerns. Targeted tariffs on unfairly traded goods — mainly from China, Russia and other non-market economies — have helped stop workarounds and boosted U.S. investment. But broad tariffs have sparked debate.
Some in the industry warn that blanket tariffs can raise costs for the 98% of U.S. aluminum jobs in recycling and fabrication. Higher tariffs can shrink demand, make U.S. products less competitive, and push more imports of finished goods. Others have been more supportive of the approach.
For its part, the Aluminum Association laid out its views on the ideal trade policy in an August LinkedIn post.
In general, the industry is focused on securing access to abundant and affordable metal, especially as domestic capacity is set to expand in the coming years. Consistent with that effort, the association recently called for targeted scrap export controls to help secure U.S. supply chains and reduce reliance on foreign imports.
Recycling and Scrap Policy: Keeping Materials at Home
Recycling is the quiet powerhouse in the U.S. aluminum market. Used beverage containers and other scrap are in high demand, but recycling rates for cans are far below global averages at around 43%. That means we are throwing away $1.2 billion+ worth of aluminum each year thanks to inconsistent and poorly implemented recycling policy.
What’s more, about 2 million metric tons of aluminum scrap leave the United States each year, mostly headed for Asia. The industry is calling on policymakers to consider new rules on scrap exports to keep more of this valuable material at home — bolstering supply chains and national security.
Smarter recycling policy, investing in sorting infrastructure and updating trade codes to better track scrap can help close the 3.5 million metric ton gap of upstream aluminum that the United States must import each year.
Looking Forward: Meeting Change Head-On
The U.S. aluminum market is at a turning point. Demand remains strong, but policy, energy, and supply chain hurdles loom. The future will belong to those who adapt, find new ways to work and push for smart, targeted rules that keep American aluminum strong.
As the market shifts, one thing remains clear: aluminum will continue shaping America’s manufacturing economy and trade policy landscape for years to come. To stay up-to-date, please visit the Aluminum Association website and consider subscribing to Aluminum Week, a weekly newsletter.
