Trump Threatens 'Global' Tariff on Aluminum Scrap

Why It Matters

A new tariff would raise costs for U.S. recyclers, potentially shifting supply chains and testing the limits of presidential trade authority. It also signals heightened trade tension that could affect global aluminum markets.

Key Takeaways

• Trump may impose 10% tariff on aluminum scrap imports
• Section 122 permits up to 15% duties for balance‑of‑payments
• USMCA shipments from Canada, Mexico currently duty‑free, may change
• Top 15 suppliers see mixed effects; many already face 10%
• Section 232 still imposes 50% tariff on primary aluminum

Pulse Analysis

The latest tariff threat underscores President Trump’s willingness to leverage every statutory tool to protect domestic industry. After the Supreme Court ruled his 2025 reciprocal duties exceeded authority under the International Emergency Economic Powers Act, Trump pivoted to Section 122 of the 1974 Trade Act, a provision historically used to counterbalance payment deficits. While the law allows up to a 15% levy, Trump has floated a 10% rate, positioning it as a stop‑gap while he evaluates other sections—232, 201, 301, and 330—that could further restrict imports.

From a market perspective, the United States imported 581,000 metric tonnes of aluminum scrap in the second half of 2025, valued at $1.53 billion. Yet the bulk of that volume—about 89%—originated from Canada and Mexico, benefitting from duty‑free status under the USMCA. A 10% tariff could erode that advantage, prompting importers to reassess sourcing strategies or pass costs onto downstream manufacturers. The impact on end‑users may be muted initially, given the modest share of higher‑tariffed countries, but sustained duties could tighten scrap supply, elevate recycling costs, and pressure aluminum product pricing.

Strategically, the move tests the resilience of U.S. trade policy frameworks. Section 122 duties are limited to 150 days unless Congress extends them, introducing a legislative check that could become a bargaining chip in broader trade negotiations. Industry groups may lobby for exemptions or seek alternative supply routes, while foreign exporters—especially from China, previously subject to higher reciprocal tariffs—could gain a relative price edge if USMCA‑eligible shipments are penalized. The episode highlights the ongoing tug‑of‑war between executive trade actions and judicial oversight, with significant ramifications for global aluminum supply chains.