U.S. President Donald Trump on the 20th signed a proclamation to cut the aluminum import tariff in half on the condition of building new or expanded production facilities in the United States.
In the proclamation, President Trump said it is necessary and appropriate to create an incentive program for corporations that invest in new primary aluminum (aluminum first produced by electrolyzing refined ore) production capacity in the United States, and stated accordingly.
For corporations whose "onshoring (domestic production)" plans are approved by the Commerce Department, President Trump directed that half of the Section 232 tariff rate under the Trade Expansion Act be applied each year to imports of primary aluminum up to the quantity equivalent to the facility's expected annual output.
Section 232 of the Trade Expansion Act is a law that allows the president to impose import restrictions if imported products are deemed to threaten U.S. national security. Citing this provision, the United States has imposed tariff on steel, aluminum, automobiles and auto parts. The aluminum tariff is currently 50%.
Earlier, Commerce Secretary Howard Lutnick recommended giving incentives to companies that build new facilities to produce primary aluminum in the United States. He also proposed that corporations expanding facilities to make primary aluminum production possible, or renovating or overhauling aging primary aluminum production facilities to increase output or improve efficiency, should receive benefits.
Minister Lutnick argued that domestic production and supply of primary aluminum, which are essential to the U.S. economy and defense industrial base, remain insufficient and that the tariff system should therefore be adjusted to promote the production and supply of aluminum.
Although President Trump did not mention the specific background for signing the proclamation, the surge in aluminum prices due to the war with Iran and the need to secure sufficient aluminum supplies for the production of U.S. munitions appear to have played a role.