Alcoa CEO Warns Tariffs Will Destroy Metal Demand in US
Oplinger Says 50% Tariff Rate Has Resulted in Annual Expense of About $850 Million for Company
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The head of the largest U.S. aluminum producer warns import tariffs will destroy demand for American metal, contrary to the Trump administration’s claim that duties will revitalize the domestic industry.
Prices now are significantly higher in the U.S. due to President Donald Trump’s 50% tariff on aluminum imports, Alcoa Corp. CEO Bill Oplinger said Sept. 22. Without changes, American customers or shareholders ultimately will pay that higher price, he said.
Oplinger’s comments are an escalation of his remarks in January when he said tariffs would have a “quieting effect” on demand. Trump set 25% import duties on aluminum in March and doubled them in June, saying tariffs are necessary to protect the American industry and revitalize production. Oplinger said the rate has left Alcoa with an annual tariff expense of about $850 million.
RELATED: Alcoa Says Trump Tariff Added $115M in Aluminum Costs in Q2
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“It’s hard to envision a situation where aluminum is systematically 50% more in the U.S. without some type of demand destruction,” Oplinger said, adding he has been on a campaign with Washington and governments around the world about the impact of the tariffs.
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Oplinger said buyers had been shipping aluminum into the U.S. before Trump raised tariffs, but consumers have worked through that inventory and are shipping metal in from Canada and elsewhere. Alcoa’s order books in the U.S. remain strong, Oplinger said, and so-called premiums have risen to cover the tariffs.
The warning from the pre-eminent U.S. aluminum producer highlights long-held concerns over the tariffs. Higher prices for the metal — used in everything from window frames to Ford F-150 trucks — significantly impact construction costs. Economists fear inflation eventually will curb consumer appetites.
Shares of Alcoa are down more than 17% year to date, as aluminum demand in the U.S. remains lackluster. The metal has been weighed down by a sharp decline in U.S. exports and a reduction in industrial uses.
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