Trump’s tariff hike sends aluminum premiums soaring for U.S. buyers

LONDON — Premiums for consumers buying aluminum on the physical market in the United States soared on Monday after U.S. President Donald Trump said he planned to increase tariffs on imported steel and aluminum to 50 per cent from 25 per cent.

The U.S. is heavily reliant on aluminum imports. About half of all aluminum used in the country for transport, packaging and construction is delivered from elsewhere, with the vast majority coming from Canada. The new tariffs are due to take effect on June 4.

Buyers on the physical market usually pay the London Metal Exchange (LME) benchmark aluminum CMAL3 price plus a premium covering taxes, transport and handling costs.

The U.S. Midwest duty-paid aluminum premium AUPc1 reached $0.58 per lb, or $1,279 a metric ton, on Monday. That was a 54 per cent jump from Friday and 164 per cent growth since the start of 2025.

Part of Monday’s growth was amplified by June 2 being the first trading day of the new month, when regional premiums often make a strong move.

Goldman Sachs said the premium would need to rise to between $0.68 and $0.70 per lb to fully reflect the 50 per cent import tariff. LME benchmark aluminum CMAL3 was last up 0.4 per cent at $2,453.5 a ton.

The higher premium could weigh on U.S. spot market purchases if consumers wait to see if there is a reversal or any exemptions, Morgan Stanley said in a note.

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Aluminum production depends heavily on the competitively priced and secure power supply source. It has been forty-five years since anyone built a primary aluminum smelter in the U.S.

Emirates Global Aluminium said in May it would invest $4 billion in construction of an aluminum plant in the U.S. with first metal expected by the end of the decade.

The plant would have an annual production capacity of 600,000 metric tons. For comparison, the U.S. imported 2.7 million tons of unwrought aluminum from Canada last year, according to the Trade Data Monitor.

Steel and aluminum tariffs were among the earliest put into effect by Trump when he returned to office in January. The tariffs of 25 per cent on most steel and aluminum imported to the U.S. went into effect in March.

The 25 per cent tariff prompted some producers to divert aluminum to Europe, leading to a 45 per cent-fall in the European aluminum premium EPDc1 since the start of 2025 and inflating an outflow of aluminum scrap from the EU to the U.S.

(Reporting by Polina Devitt, Editing by David Goodman and David Evans)