On Tuesday, March 11th, U.S. President Donald Trump announced an increase in tariffs on Canadian metals to 50%, causing the premium for consumers purchasing aluminum on the U.S. spot market to soar to a historic high. This tariff hike was a response to a 25% tariff imposed by Ontario, Canada, on U.S. electricity imports and was set to take effect on Wednesday.
Traders predict that premiums will continue to rise as producers pass on the additional costs of the tariffs as much as possible. According to data from the information provider Trade Data Monitor (TDM), about 70% (or 3.92 million metric tons) of the primary and alloyed aluminum exported to the U.S. last year came from Canada.
Analysts calculated that the initially planned 25% tariff would necessitate an increase in premiums to 47 cents per pound or over $1,000 per ton to cover the sellers’ additional costs.
On Tuesday, the premium for aluminum in the U.S. Midwest, including taxes, jumped to 45 cents per pound, or over $990 per metric ton, a nearly 20% increase from Monday. Since early 2025, it has climbed more than 70%.
Despite the rising premiums for U.S. buyers, industry sources suggest that premiums in other regions may continue to fall as aluminum produced in countries subject to import tariffs is diverted.
Trump announced the increase in tariffs on Canadian steel and aluminum to 50% on Tuesday morning but retracted the decision hours later, maintaining the originally planned 25% tariff. This series of policy changes caused significant volatility in financial markets. Investors are now focusing on the upcoming automotive tariffs set to be implemented in April and potential retaliatory measures by various countries.
Despite the intensified market volatility, Trump remains steadfast in his trade policy, stating, “When we achieve fair trade, the U.S. economy will become more prosperous.” However, as the U.S.-Canada trade war heats up further, the market will continue to closely monitor future developments.
