Seven years after Section 232 tariffs first shielded US aluminium producers, America still imports 60 per cent of the primary aluminium it consumes. That single statistic, buried in the US Geological Survey’s 2026 Mineral Commodity Summary, is the uncomfortable backdrop to President Trump’s latest move. On July 20, Trump signed a proclamation directing the Commerce Secretary to build an incentive programme around the existing aluminium tariff regime, alongside an executive order tightening critical mineral sourcing rules for defence contractors.
The headlines called it tariff policy. The real question is narrower and more interesting: can a tariff discount, offered only to companies that build new smelting capacity, do what a decade of tariff walls could not?
The arithmetic is stark. US primary aluminium production fell to an estimated 660,000 tonnes in 2025, down 26 per cent from 889,000 tonnes in 2021, even as Section 232 tariffs sat at 25 per cent and then 50 per cent. Three companies now run just six primary smelters across five states, against 23 smelters operated by 12 companies in 2000.
Installed capacity is 1.31 million tonnes a year, meaning the country’s smelters are running at barely 50 per cent utilisation — two of six lines, at Hawesville, Kentucky, and New Madrid, Missouri, have sat idle since 2022 and 2024 respectively. The reason is not metallurgy but electricity, wherein power accounts for roughly 30-40 per cent of primary aluminium production costs, and Canadian smelters running on Quebec hydropower pay USD 26.50-41 per megawatt-hour against far higher US industrial rates.
Against domestic demand of 5.7 million tonnes of apparent consumption, US smelters supply barely a tenth of the aluminium the country actually needs, and the remainder comes from imports and from 3.6 million tonnes of secondary (recycled) production, which now does the heavy lifting that primary smelting once did.