The truth is Alcoa has already experienced a cost of USD 20 million since the tariff being implemented by the US government. Why? Because Alcoa’s 70 per cent of the aluminium production takes place in Canada, which is now subject to Donald Trump’s 25 per cent import duty.
Alcoa’s CEO William Oplinger analysed that this quarterly cost equates to an annual hit of approximately $400 to $425 million. Let alone the financial cost, Alcoa also bore a 1 per cent drop in product during the first quarter of 2025. However, amid all this, Oplinger still remains cautiously optimistic, believing that an increased Midwest premium would help offset much of the cost pressure in support of Alcoa’s domestic smelters.
The impact could have been bigger and higher if an additional 25 per cent tariff on Canadian-origin aluminium would have had imposed under the US International Emergency Economic Powers Act (IEEPA), effective from March 4, 2025. As such, the imports would have been subject to a combined 50 per cent tariff. However, exemptions effective from March 7, led to the scrapping of this additional levy.
Alcoa also anticipates the steep US tariff on China will drive up its annual costs by USD 10 to 15 million, as the former relies on the latter for some input materials and has yet to find viable alternatives.
