The US tariff policy triggers shock in global aluminum market
On April 3, the United States announced the 25% increase in global aluminum tariffs, covering a wide range of aluminum products and derivatives, which had a significant impact on the global aluminum market and caused aluminum prices to plummet. For major aluminum exporting countries such as Mexico, Canada, and China, It means an increase in export costs, which is a huge impact on aluminum trading companies. Based on this tariff policy prediction, other countries will introduce corresponding response policies, which will further exacerbate global trade tensions.
Why did the United States impose tariffs?
The reason for the US to impose tariffs this time is to "curb the distortion of the global market caused by China's aluminum overcapacity", but the underlying logic is to cooperate with its manufacturing repatriation strategy. In 2025, the US "Inflation Reduction Act" will be fully implemented. The demand for aluminum in industries such as new energy vehicles and photovoltaics will surge, while the domestic electrolytic aluminum production capacity in the United States accounts for only 5% of the world (2024 data), and is highly dependent on imports. Through tariff barriers, the United States is trying to force downstream companies to purchase domestic aluminum resources, while weakening China's dominant position in the global aluminum industry chain. Resource competition under the global green transformation Aluminum, as a core material for lightweight and energy transformation (the amount of aluminum used in electric vehicles is 2-3 times that of fuel vehicles), has become the focus of strategic resource competition among major powers. The US move is aimed at ensuring the safety of its own raw materials in the new energy industry chain, and in line with its dominant "friendly shore outsourcing" system, push the aluminum supply chain to tilt toward allies such as Canada and the Middle East.
What impact does this policy have on China?
As the global largest aluminum producer, China exports 15% of its total exports to the United States. The issue of this policy is undoubtedly a severe blow to Chinese aluminum manufacturers. The increase in tariffs may lead to the short-term oversupply of Chinese aluminum products and huge price fluctuations. In addition, the offshore RMB exchange rate against the US dollar depreciated by 0.8% on the same day, further depressing the LME aluminum price denominated in US dollars. The export profits of Chinese aluminum companies have shrunk significantly due to the double squeeze of exchange rates and tariffs.
How will China respond?
Faced with the tariff pressure from the United States, the reactions of various countries are not consistent. Canada, Japan and other countries are still watching cautiously. The European Union said that although it prefers to resolve differences through negotiations, it is also prepared to retaliate. China immediately introduced reciprocal countermeasures and announced that it would impose an additional tariff of 34% on US imports.
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