It is reported that the US policy of imposing a 50% tariff on aluminum products continues to ferment, causing an earthquake in the aluminum supply chain. This wave of trade protectionism is forcing the US manufacturing industry to make a difficult choice between soaring costs and industrial transformation.
Heavy tariff hammer: aluminum prices soar, car companies bear the brunt
In March 2025, the US tariffs on aluminum products from countries such as Canada and Mexico skyrocketed from 10% to 50%, resulting in a 200% increase in the US Midwest aluminum premium (P1020 aluminum dutiable delivery cost) within the year. According to CRU Group data, as of August, the premium has reached a historical high of 72 cents per pound.
Ford became one of the biggest victims. Its Q2 2025 financial report shows a net profit loss of $36 million due to paying an additional $800 million in tariff fees, marking the first quarterly loss since 2023. The company expects the impact of tariffs for the whole year to reach $2 billion to $3 billion, forcing it to suspend the export of high-end car models to China and postpone the production of the next generation of electric vehicle models. General Motors, Trantis and other car companies suffered losses of over 1.1 billion US dollars due to tariffs during the same period, and the industry’s annual profit loss may exceed 7 billion US dollars.
Recycling breaks the deadlock: scrap aluminum becomes a “hot commodity”, technological innovation reduces costs and increases efficiency.
Faced with import cost pressure, Alcoa has turned its attention to scrap aluminum recycling. Data shows that the weight of cans discarded in the United States in 2024 is equivalent to its total domestic production of primary aluminum. If effectively recycled, aluminum imports can be reduced by half.
1. Accelerating capital layout and recycling track
The United States has announced 14 large-scale recycling projects, and companies such as Yiqiu Resources have built over 20 automated sorting factories in the eastern United States through wholly-owned subsidiaries, with an annual processing capacity of 500000 tons of scrap metal. It adopts laser sorting technology, which can increase the purity of scrap aluminum to 99.7%, reduce processing costs by 70% compared to primary aluminum production, and consume only 5% of its energy.
2. Dual wheel drive of policy and technology
The US Department of Commerce has included scrap aluminum recycling in the subsidy scope of the Inflation Reduction Act, and companies can receive a tax credit of $150 per ton of scrap aluminum processed. At the same time, the popularization of technologies such as laser sorting and AI recognition has increased the efficiency of aluminum scrap recycling by 30% and controlled the impurity rate within 0.3%.
Industry turning point: Can recycling replace imports?
Despite the promising prospects of the recycling industry, challenges still exist:
♦ Scale bottleneck: The current aluminum recycling rate in the United States is only 65%, far lower than the 85% in Europe, requiring the addition of millions of tons of processing capacity;
♦ Technical barriers: High end aluminum alloys (such as aerospace materials) still rely on primary aluminum, and the performance of recycled materials needs to be further broken through;
♦ Policy continuity: If the Trump administration adjusts tariffs in the future, the recycling industry may face demand fluctuations.
CRU Group analysis points out that if the United States achieves a 75% scrap aluminum recycling rate by 2026, it can meet 40% of its aluminum demand and save over $12 billion in import costs annually.
Conclusion: Trade protection drives industrial upgrading
The 50% aluminum tariff is like a double-edged sword, which not only damages the traditional supply chain but also accelerates the transformation of the US aluminum industry towards a circular economy. Under the call of car companies such as Ford and General Motors, the US government may introduce the National Recycling Strategy in 2026, aiming to increase the utilization rate of scrap aluminum to 80% by 2030. The industrial transformation triggered by tariffs is revealing a truth: in the context of globalization, technological innovation and resource restructuring are the key to breaking through.
Post time: Aug-13-2025