02-18-2025

Adjusting Imports of Aluminum Into the United States

ProclamationView the Original .pdf
View the Original .pdf

The 1-Minute Brief

What: This proclamation increases the tariff on imported aluminum and aluminum derivative products from 10% to 25%. It also terminates existing alternative agreements with key trading partners, including Canada, Mexico, and the European Union, subjecting them to the new higher tariff. The measure also ends the product exclusion process, which allowed U.S. companies to request exemptions for specific aluminum products.

Money: The proclamation itself does not provide a specific cost analysis or CBO score. However, the increased tariff is expected to generate additional federal revenue. The direct financial impact will be felt by industries that import and use aluminum, likely leading to higher costs for those goods.

Your Impact: The most likely direct effect on an average American will be an increase in the price of goods made with aluminum. This includes everyday items like beverage cans, cars, appliances, and building materials. The extent of the price increase will depend on how much of the tariff cost is passed on to consumers by manufacturers.

Status: This is a presidential proclamation, signed on February 10, 2025, with the new tariff rate and termination of agreements set to take effect at 12:01 a.m. eastern time on March 12, 2025.

What's Actually in the Bill

This presidential proclamation fundamentally alters the trade landscape for aluminum imports into the United States. Citing national security concerns, it aims to protect and revitalize the domestic aluminum industry by making imported aluminum more expensive. The core of the action is a significant increase in the tariff rate on aluminum and its derivatives.

Core Provisions:

  • Tariff Increase: The ad valorem tariff on most imported aluminum articles and derivative products is increased from 10 percent to 25 percent. This change takes effect on March 12, 2025.
  • Termination of Agreements: All previously negotiated "alternative ways" to address the national security threat with specific countries are terminated. This means that as of March 12, 2025, imports from Argentina, Australia, Canada, Mexico, the European Union, and the United Kingdom will no longer be exempt and will be subject to the 25 percent tariff.
  • End of Exclusions: The process that allowed U.S. companies to request exclusions for specific aluminum products not produced in sufficient quantities or quality domestically is terminated. All existing general approved exclusions will become ineffective on March 12, 2025.
  • Expanded Scope: The proclamation establishes a process for the Secretary of Commerce to include additional downstream aluminum derivative products under the tariff regime, either through internal review or at the request of domestic producers.
  • Enforcement: U.S. Customs and Border Protection (CBP) is directed to enhance its review of aluminum import classifications to prevent misclassification and evasion of the new tariffs.

Stated Purpose (from the Sponsors):

The proclamation's stated purpose is to address the threat to U.S. national security posed by the decline of the domestic aluminum industry. The text asserts that global overcapacity, primarily fueled by China, has suppressed prices and harmed American producers.

  1. To restore the health of the U.S. aluminum industry by increasing domestic smelter capacity utilization to a target level of at least 80 percent.
  2. To counter circumvention of existing tariffs, where foreign producers have been transshipping or further processing aluminum in exempted countries to avoid duties.
  3. To address the surge in aluminum imports from previously exempt countries, which the proclamation states have undermined the original national security objectives.
  4. To simplify the tariff regime by eliminating alternative agreements and the product exclusion process, which the text argues have created loopholes and undermined the tariff's effectiveness.

Key Facts:

Affected Sectors: Manufacturing (especially automotive, aerospace, and construction), beverage industry, consumer goods, and construction.
Timeline: The new tariff rate and termination of existing agreements and exclusions are effective March 12, 2025.
Scope: The proclamation applies to aluminum imports from all countries, except for specific provisions regarding Russia. It eliminates previous exemptions for key allies.

The Backstory: How We Got Here

The Era of Section 232 Tariffs (2018-Present):

The use of tariffs on aluminum is not a new phenomenon. The current situation is an escalation of a policy that began in 2018.

In March 2018, the Trump administration first imposed a 10% tariff on aluminum imports (and a 25% tariff on steel) under Section 232 of the Trade Expansion Act of 1962. This law allows the President to adjust imports if they are found to threaten national security. The initial move was met with significant debate, with domestic producers supporting the measure and downstream industries warning of increased costs.

Over the following years, the U.S. negotiated alternative arrangements with key allies, leading to exemptions for countries like Canada, Mexico, and the European Union, sometimes in the form of quotas. However, the proclamation argues these measures were insufficient. It points to a 30% decrease in U.S. primary aluminum production from 2020 to 2024 and a smelter capacity utilization rate of only 52% in 2024, far below the 80% target. The document also highlights a significant increase in import volumes from these exempt countries, suggesting they were being used as a pass-through for aluminum from other nations, particularly China.

Why Now? The Political Calculus:

  • Economic Pressures: The proclamation is a direct response to the continued struggles of the domestic aluminum industry, including the closure of two primary aluminum smelters since the original tariffs were imposed. The administration aims to demonstrate a tough stance on trade and a commitment to protecting American manufacturing jobs.
  • Addressing Circumvention: There is a stated belief that the previous system of exemptions and exclusions created loopholes that were exploited by foreign producers, particularly from China, to evade tariffs. This action is designed to close those loopholes decisively.
  • Shift in Strategy: The move from a 10% tariff with exemptions to a blanket 25% tariff on nearly all imports represents a significant strategic shift. It prioritizes the protection of the primary aluminum industry over the cost concerns of downstream manufacturers who use aluminum in their products.

Your Real-World Impact

The Direct Answer: This directly affects specific industries heavily reliant on aluminum, with the costs likely to be passed on to most Americans through higher prices on consumer goods.

What Could Change for You:

Potential Benefits:

  • Strengthened Domestic Industry: If the tariffs lead to increased domestic aluminum production, it could result in more jobs and investment in the U.S. aluminum sector.
  • National Security: Proponents argue that a healthier domestic aluminum industry is essential for national security, ensuring a reliable supply for defense applications.

Possible Disruptions or Costs:

Short-term (First 1-2 years):

  • Higher Prices: Expect to see increased prices for products containing aluminum, such as cars, appliances, canned beverages, and construction materials, as manufacturers pass on the higher cost of raw materials.
  • Supply Chain Adjustments: Companies that rely on imported aluminum from now-unexempted countries like Canada and Mexico will face a sudden cost increase, potentially leading to supply chain disruptions as they seek new suppliers or absorb the cost.

Long-term:

  • Sustained Higher Costs: The 25% tariff could become a long-term feature of the U.S. economy, leading to permanently higher prices for aluminum-intensive goods compared to global market prices.
  • Retaliation: Foreign countries, particularly close allies like Canada, Mexico, and the EU, may impose retaliatory tariffs on American exports, harming U.S. industries that sell goods abroad.

Who's Most Affected:

Primary Groups:

  • U.S. Aluminum Producers: Stand to benefit from increased protection against foreign competition.
  • U.S. Manufacturers: Companies in the automotive, aerospace, beverage, and construction industries will face higher raw material costs.

Secondary Groups:

  • American Consumers: Will likely bear the ultimate cost through higher prices on finished goods.
  • U.S. Exporters: May be targeted by retaliatory tariffs from other countries.

Regional Impact: States with a heavy manufacturing presence, particularly in the automotive and aerospace sectors, will feel the economic impact most acutely. Conversely, regions with aluminum production facilities may see economic benefits.

Bottom Line: While intended to bolster a specific domestic industry, this action will likely increase the cost of many common goods for the average American.

Where the Parties Stand

Republican Position: "Protecting American Industry"

Core Stance: The party is generally supportive of using tariffs to protect domestic industries, viewing them as a tool to counter unfair trade practices and bolster national security.

Their Arguments:

  • ✓ The tariffs are necessary to combat global overcapacity and protect the U.S. industrial base from unfairly subsidized foreign competitors.
  • ✓ A strong domestic aluminum industry is vital for national security and cannot be allowed to collapse due to import pressures.
  • ⚠️ Some Republicans have historically expressed concern about the negative impact of tariffs on downstream industries and consumers, fearing they act as a tax on American businesses and families.

Legislative Strategy: As this is a presidential proclamation, the legislative branch has a limited role. However, expect supportive statements from members who favor protectionist trade policies and potential legislative proposals to codify or expand these tariffs.

Democratic Position: "Targeted, Not Blanke‪t"

Core Stance: The party is more critical of broad, unilateral tariffs, especially when applied to allies, and favors a more targeted, collaborative approach to trade disputes.

Their Arguments:

  • ✓ They agree on the need to address unfair trade practices, particularly from China.
  • ⚠️ They argue that imposing tariffs on close allies like Canada and the EU is counterproductive and harms U.S. manufacturers and consumers.
  • ✗ Broad tariffs are seen as a tax on American families that can lead to price increases and harm downstream industries.

Legislative Strategy: Democrats are likely to be critical of the proclamation, highlighting the potential for increased consumer costs and strained relationships with allies. They may advocate for rolling back these tariffs and pursuing negotiated solutions to trade issues.

Constitutional Check

The Verdict: ✓ Constitutional

Basis of Authority:

The President's authority for this action stems from Section 232 of the Trade Expansion Act of 1962.

Section 232 of the Trade Expansion Act of 1962 (19 U.S.C. §1862): This statute authorizes the President to "adjust the imports of an article and its derivatives" if the Secretary of Commerce determines that said article is being imported "in such quantities or under such circumstances as to threaten to impair the national security."

Constitutional Implications:

[Delegation of Powers]: The core legal question surrounding Section 232 is whether Congress has unconstitutionally delegated its legislative power over foreign commerce to the President.
[Precedent]: The U.S. Court of International Trade and federal appeals courts have consistently upheld the constitutionality of Section 232, ruling that the statute provides an intelligible principle to guide the President's actions. The Supreme Court has, on multiple occasions, declined to hear challenges to the Trump administration's Section 232 tariffs on steel and aluminum.
[Federalism]: This action is a clear exercise of federal power over international trade and does not significantly implicate powers reserved for the states.

Potential Legal Challenges:

Legal challenges are highly likely, but their success is uncertain given past precedent.

  • Importers and downstream industries will likely file suit, arguing that the President has exceeded the authority granted by Section 232 and that the "national security" justification is a pretext for economic protectionism.
  • Foreign governments may challenge the tariffs at the World Trade Organization (WTO), although WTO rulings are not directly enforceable under U.S. law.

Your Action Options

TO SUPPORT THIS BILL

5-Minute Actions:

  • Call The White House: Contact the White House comment line at (202) 456-1111 to express your support for Proclamation 10895 and the protection of the U.S. aluminum industry.
  • Call Your Rep/Senators: Use the Capitol Switchboard at (202) 224-3121 to tell your representatives you support the President's actions on aluminum tariffs. "I'm a constituent from [Your City/Town] and I urge [Rep./Sen. Name] to support the President's Proclamation 10895 to protect American aluminum producers."

30-Minute Deep Dive:

  • Write a Detailed Email: Find contact information for your representatives and the leadership of committees like the House Ways and Means Committee and Senate Finance Committee to explain why you support this protectionist measure.
  • Join an Organization: Groups like the American Iron and Steel Institute and the Alliance for American Manufacturing advocate for strong trade enforcement.

TO OPPOSE THIS BILL

5-Minute Actions:

  • Call The White House: Contact the White House comment line at (202) 456-1111 to voice your opposition to the tariff increase, highlighting concerns about consumer costs and relations with allies.
  • Call Your Rep/Senators: Use the Capitol Switchboard at (202) 224-3121. "I'm a constituent from [Your City/Town] and I urge [Rep./Sen. Name] to oppose Proclamation 10895 and the new tariffs on aluminum, which will raise prices for American families."

30-Minute Deep Dive:

  • Write a Letter to the Editor: Submit a letter to your local newspaper outlining the potential negative impacts of the tariffs on consumers and local manufacturing businesses.
  • Join an Organization: Many industry groups representing downstream users of aluminum have historically opposed these tariffs, such as the American Petroleum Institute and the Association of Equipment Manufacturers. The Aluminum Association, which represents the full supply chain, has also expressed concern about such a high tariff rate.