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Will the US Move to Reduce 50% Tariffs on Canadian Aluminium and Steel Imports?

By: Natalie Scott-Gray, Senior Metals Demand Analyst, EMEA and Asia region

On 19th August, two-hours before the US was set to implement 50% tariffs on a range Canadian goods (estimated at $20bn), the White House announced a 72-hour delay, citing ongoing progress in talks. Following public statements from Canada’s Prime Minister Mark Carney over the last month, outlining the negative impact of pre-existing 50% tariffs on aluminium and its derivate products, market expectation has grown that so called ‘talks’ between the US and Canada would include a focus on current Section 232 tariffs. Overnight, it has been reported that a tentative trade deal is being reached, in which either reduced tariffs and/or a quota system will be enacted towards aluminium/steel.

What do we know?

As things stand, no deal including Section 232 tariffs has been reached; however, an in-person meeting between Canada’s Foreign Minister and the US Secretary of State will take place at the White House at 1.30pm EST today.

Historical Recap of US Tariffs and the Impact on LME 3M and COMEX Aluminium Price

 

image-20260820124602-4

Source: Bloomberg, StoneX

Since the implementation of 25% tariffs on aluminium articles and derivative aluminium articles on 10th February 2025, the White House has moved several times to amend tariffs:

 

Date

Change

What changed vs. 10 Feb baseline

Effective date

10 Feb 2025

Baseline – Proclamation 10895

Trump raised aluminium Section 232 tariffs from 10% → 25%, extended 25% treatment across countries by terminating exemptions/alternative arrangements, expanded coverage of derivative aluminium products, and ended the existing product-exclusion process. (The White House)

12 Mar 2025

2 Apr 2025

Reciprocal tariffs kept separate from Section 232

Trump's reciprocal-tariff EO specifically excluded aluminium articles/derivatives already subject to Section 232 from the new reciprocal tariff. This prevented straightforward stacking of the reciprocal tariff on the same Section 232-covered aluminium product. (The White House)

Apr 2025

Apr 2025

Beer and empty aluminium cans added

Commerce added beer and empty aluminium cans as derivative aluminium products pursuant to the February proclamation. This expanded the product scope rather than changing the 25% headline rate. (Federal Register Public Inspection)

Apr 2025

30 Apr 2025

New derivative-product inclusion mechanism

Commerce established the process contemplated by Proclamation 10895 allowing requests for additional downstream products to be brought under Section 232. This became important later in 2025. (Bureau of Industry and Security)

2025

8 May 2025

US–UK deal announced

White House agreed in principle to establish preferential quota treatment for UK aluminium/steel if UK supply-chain-security conditions were satisfied. It did not immediately eliminate the 25% aluminium tariff. (The White House)

Future implementation

3 Jun 2025

Major increase: 25% → 50%

Proclamation 10947 doubled the Section 232 tariff on aluminium articles and derivatives from 25% to 50% for most countries. (The White House)

4 Jun 2025

3 Jun 2025

UK carved out from 50% increase

UK aluminium remained at 25%, rather than rising to 50%. The proclamation authorised future quotas/rate changes depending on implementation of the US–UK Economic Prosperity Deal. (The White House)

4 Jun 2025

3 Jun 2025

Tariff calculation/content rules clarified

For relevant derivative products, the 50% Section 232 duty applied to aluminium content, while non-aluminium content could instead be subject to applicable reciprocal/other tariffs. CBP was instructed to enforce aluminium-content declarations strictly. (The White House)

4 Jun 2025

16 Jun 2025

UK quota framework formally authorised

White House formally instructed Commerce/USTR to design a tariff-rate quota for UK aluminium and derivative aluminium products. Until implemented, applicable Section 232 treatment continued. (The White House)

Future implementation

18–19 Aug 2025

Huge expansion of derivative coverage

Commerce added 407 product categories to the steel/aluminium derivative lists. Products included machinery, heavy equipment, railcars, furniture, compressors, pumps, wind turbines and other downstream goods. Their aluminium content became subject to the 50% Section 232 tariff.

18 Aug 2025

2 Apr 2026

Major redesign of metal tariffs

White House substantially reworked the aluminium/steel/copper regimes. Among other things, it moved specified products toward full customs-value tariffs rather than merely taxing metal content, reorganised derivatives into different tariff categories, provided lower treatment for some UK and US-origin-metal products, and terminated the old derivative-inclusion process in favour of presidential/Commerce-USTR additions. (The White House)

6 Apr 2026

2 Apr 2026

50% full-value treatment for core products

Covered aluminium/steel products and certain derivatives generally became subject to 50% on the full customs value, rather than 50% only on the aluminium content. Certain other derivatives were given a 25% full-value rate, with preferential treatment in specified cases. (The White House)

6 Apr 2026

2 Apr 2026

US-origin metal preference

Certain derivative articles made entirely from aluminium smelted and cast in the US received a reduced 10% Section 232 rate. UK products also received specified preferential treatment. (The White House)

6 Apr 2026

1 Jun 2026

Further recalibration / relief for machinery

White House changed the regime again: agricultural equipment and certain residential HVAC products were moved into the temporarily reduced 15% derivative category, and special temporary treatment was introduced for certain mobile industrial machinery/equipment. (The White House)

8 Jun 2026

1 Jun 2026

New derivative products added

Aluminium lithographic plates and steel racks were expressly brought into derivative-product coverage. (The White House)

8 Jun 2026

1 Jun 2026

US-content threshold loosened

The threshold for a product to qualify as made “entirely” from US aluminium/steel/copper was reduced from 95% to 85%, making preferential treatment easier to obtain. (The White House)

8 Jun 2026

1 Jun 2026

Temporary 25% category + partner preferences

Certain aluminium/steel articles received a temporary 25% Section 232 rate through end-2027, with substantially lower effective treatment for the EU, UK, Japan, Korea, Switzerland, Taiwan and several other partners under the proclamation's MFN-plus-Section-232 formula. (The White House)

8 Jun 2026

 

Source: Whitehouse.gov; Bloomberg, StoneX

What does this show us?

Over the last 12 months it appears as though the administration is beginning to selectively ease Section 232 aluminium and steel tariffs (after the sharp 2025 tightening). Recent changes provide targeted relief for downstream manufacturers, trading partners and companies investing in U.S. aluminium capacity. However, the potential reduction in tariffs on Canada, the single largest importer of aluminium into the US (~45% of total), would mark the most significant adjustment to date.

What Might We See?

Based on President Trump’s own comments in which he reportedly said he may bring tariffs down to “a level where other countries are”, this suggests a 25% tariff rate could be possible. However, while we suspect this might apply to primary aluminium and steel, the outlook for derivative products is more complicated, while current 25% tariffs on Canadian automotives may be lowered to 15%.

The US Midwest premium has been the primary transmission mechanism for tariffs costs into the physical market, having risen 53% over the last 12 months, from 70.3c/lb in August 2025 to a peak of 118.9c/lb in May 2026, before easing to 107.7 c/lb at the time of writing. Please note, the premium has been trading above the level implied by the 50% tariffs due to Middle East disruption which has elevated global freight rates.

Scenario Outlook

 

image-20260820124850-5

 

 

Source: Bloomberg, StoneX


Producer Price Index by Industry: Alumina and Aluminum Production and Processing

image 136125

Source: US Bureaus of Labour Statistics; Bloomberg, StoneX

 

To read our latest Weekly Base Metal Market Report, following this link

 

image 136137

Source: Bloomberg, StoneX

image 136138

Source: Type or use Ctrl+Shift+V here to paste

 

 

image 136142

Source: Bloomberg, StoneX

image 136143

Source: Bloomberg, StoneX

 

 

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