Abstract and summary
After announcing a 10% tariff on imports from China on February 1, 2025 and taking effect, US President Trump signed an executive order again on February 10 local time, announcing a 25% tariff on all imports of aluminum and steel into the United States. At the same time, he also said on the same day that there are "no exceptions and exemptions" in the relevant requirements, and that tariffs on cars, chips and drugs will be considered in the future.
From the current situation of China's aluminum trade with the United States, with the increase of tariffs in recent years, China's aluminum exports to the United States are relatively low, so the direct impact on China's aluminum exports is limited. However, the tariff policy or affect the downstream such as household appliances, new energy vehicles and other industries exports, and then indirectly affect China's aluminum exports. In addition, the imposition of tariffs may directly increase the price and spot premium of related products such as aluminum and aluminum products imported from the United States in the short term, and eventually pass to end consumption. On the whole, the impact of the tariff policy on China's exports of aluminum and aluminum products is more controllable, and the trend of aluminum prices is more driven by the need to pay attention to the supply and demand fundamentals.
I. Events and policies
After announcing a 10% tariff on imports from China on February 1, 2025 and taking effect, US President Trump signed an executive order again on February 10 local time, announcing a 25% tariff on all imports of aluminum and steel into the United States. At the same time, he also said on the same day that there are "no exceptions and exemptions" in the relevant requirements, and that tariffs on cars, chips and drugs will be considered in the future. The sanctions are an escalation of the existing "232" sanctions, raising tariffs on aluminum products from the previous 10% to 25%. After the announcement of a new round of tariff policy, the market has given continuous attention, in fact, since the United States has imposed tariffs on China's aluminum in 2018, China's exports of aluminum to the United States have shrunk significantly, then the current latest tariff policy on the aluminum industry and the impact of aluminum prices, this article will simply sort out.
Second, the United States on China's aluminum and aluminum related major tariff policy review
Since 2018, the United States has continued to impose tariffs on Chinese aluminum, and the specific measures are as follows, according to public information news collation:
① In March 2018, the 232 investigation tariff measures were implemented. On the grounds of "national security", the United States imposed global tariffs of 25% and 10% on imported steel and aluminum products respectively according to Section 232 of the Trade Expansion Act of 1962, and subsequently granted duty-free quotas to Canada, Mexico, the European Union and the United Kingdom, but China was not exempted.
In 2018, 301 tariffs were imposed. The Office of the United States Trade Representative (USTR) has accused China of unfair trade practices such as forced technology transfer under a Section 301 investigation. About 360 billion US dollars of Chinese goods were subject to tariffs, of which aluminum and its products such as aluminum sheets, aluminum tubes, aluminum foil, etc. were included in the list, and the tax rate was gradually increased from 10% to 25%.
In May of the first half of 2024, the Section 301 tariffs will be adjusted. The White House released the results of a four-year review of the 301 tariffs on China, announcing that on the basis of the original 301 tariffs on China, the tariff rate on electric vehicles, lithium batteries, photovoltaic cells, semiconductors, steel and aluminum imports from China will be further increased to 25%, with an effective period of 2024 to 2026.
On September 27, 2024, anti-dumping and countervailing investigations were conducted. The US Department of Commerce announced a final anti-dumping ruling on aluminum profiles imported from China, ruling that the dumping rate of producers/exporters enjoying separate tax rates is 4.25%, and the dumping rate of non-cooperative enterprises is 376.85%. At the same time, the US Department of Commerce made a final anti-subsidy ruling on aluminum profiles imported from China, ruling that the Chinese producer/exporter tax rate is 14.56% - 168.81%.
On February 1, 2025, US President Donald Trump signed an executive order announcing a 10% tariff on imports from China, a 25% tariff on imports from Canada and a 10% tariff on imports from Mexico, effective February 4, 2025. However, on the eve of the tariffs taking effect, the United States gave Canada and Mexico a 30-day buffer period, delaying the effective time to March 4, and the Chinese tariff policy will remain unchanged.
On February 10, 2025, U.S. President Donald Trump signed an executive order announcing a 25% tariff on all steel and aluminum imports into the United States.
Third, a new round of aluminum tariff impact analysis
1, the impact on China's aluminum and aluminum products exports
Judging from the current aluminum trade situation between China and the United States, the direct impact of tariffs on China's aluminum and aluminum products exports is relatively limited. The largest source of primary aluminum in the United States is Canada, less imports from other countries, and affected by previous tariffs and anti-dumping policies, the cost of importing aluminum from China is much higher than other sources, so China is generally exported to the United States in the form of aluminum or aluminum products. According to the General Administration of Customs data, in 2024, China's annual aluminum exports of 6.303 million tons, an increase of 19.2%, of which the total amount of aluminum exported to the United States is near 257,000 tons, mainly concentrated in aluminum plate foil, aluminum profiles and other products, direct exports to the United States of aluminum only accounted for about 4.1% of the total export of aluminum. It can be seen that with the increase of tariffs in recent years, the competitiveness of China's aluminum products in the US market has declined, and the export volume has continued to decrease, so the direct disturbance of China's aluminum exports is limited. From the perspective of aluminum exports, in 2024, China's total exports of aluminum products reached 3.205 million tons, an increase of 17.3%, of which about 527,000 tons of aluminum products were exported to the United States, and the amount of aluminum products directly exported to the United States accounted for 16.5% of the total exports of aluminum products, which is higher than the proportion of aluminum exports, and the impact of tariffs on aluminum products is slightly higher than that of aluminum. However, China's aluminum products are highly competitive in the world, and the direct impact on the whole is limited.
From an indirect point of view, Trump said that there are no exceptions and exemptions in this tariff, Canada and Mexico, as the main aluminum suppliers, will be greatly affected, and Mexico and Canada are important export markets for China's aluminum, according to customs data, in 2024, China's direct exports to Mexico and Canada totaled 885,000 tons of aluminum, an increase of 24.4%. It accounts for 14.06% of China's annual aluminum exports, so the tariff policy may further increase the cost and difficulty of China's aluminum and aluminum products entering the United States through transit trade. In addition, the tariff policy or affect downstream industries such as household appliances, new energy vehicles and other exports to the United States, and then affect China's indirect exports of aluminum.
2. Impact on aluminum market and aluminum price
According to statistics, in recent years, the United States' own primary aluminum production capacity is difficult to meet its consumer demand, and about half of its aluminum consumption depends on imports, so the imposition of tariffs in the short term or will directly increase the price of United States imported aluminum and aluminum products and other related products, the local spot premium in the United States or have risen, downstream enterprise procurement and production costs inevitably increase, and ultimately transmitted to the end consumption. That would push up domestic inflation even further. In the long run, trade frictions around the world may inhibit demand and hinder economic development, making the market more concerned about the economy and trade, which is not conducive to aluminum price performance.
On the whole, the impact of the tariff policy on China's exports of aluminum and aluminum products is more controllable, and the trend of aluminum prices is more driven by the need to pay attention to the supply and demand fundamentals. At present, some enterprises in the southwest region of the supply end that had stopped production or underwent technical transformation gradually resumed production, and the operating capacity increased slightly. Demand side of the downstream slow resumption of work, aluminum production has risen, but aluminum prices are at a high level on the downstream to take goods has a certain impact, the short-term is still in the accumulation cycle, aluminum prices upward drive is insufficient, but the peak season demand recovery and domestic policy expectations still exist, maintain a callback to the low distribution of ideas, pay attention to consumption, inventory changes and the uncertainty of tariff policy caused by volatility.
