Alcoa, a global aluminium production entity with major smelters in Canada, Australia and Iceland, among other locations, has warned that the proposed implementation of the tariff plan by the US government could lead to 100,000 employment losses, reported Reuters.

 

US President Donald Trump said earlier this month he would impose a flat 25% tariff on aluminium imports in a bid to boost US production of the metal.

 

But Bill Oplinger, Alcoa's CEO, told the BMO Global Metals and Mining Conference in Florida the tariffs could cost about 20,000 US aluminium industry jobs and a further 80,000 jobs across the value-chain sectors that support it.

 

"This is bad for the aluminium industry in the US. It's bad for American workers," said Oplinger, an engineer by educational qualification who became CEO in 2023, shared during a webcast.

 

In total, the aluminum industry directly employs 164,000 workers in the US and indirectly employs an additional 272,000 workers within industries such as mining, construction and manufacturing, according to the Aluminum Association.

 

Canada, the top source of aluminum imported by the US, shipped $11 billion worth of raw aluminum and goods containing a significant amount of aluminum to the US last year, according to Commerce Department data. 

 

In total, the US imported $27 billion worth of aluminum last year, which also came from trading partners like China, Mexico, the United Arab Emirates and South Korea. Meanwhile, the US exported $14 billion worth of aluminum across the globe.

 

The US largely relies on foreign aluminum because countries like Canada have relatively lower energy costs to produce it, according to a 2022 report published by the nonpartisan Congressional Research Service.

 

Meanwhile, the Trump administration has defended the move, calling it the need of the hour. 

 

"International companies have long undercut American aluminum production by flooding the US market with cheap imports from countries like Australia, Brazil and Canada," remarked White House spokesman Kush Desai, while speaking to CNN. 

 

"Although disruptive to these companies’ business models, President Trump’s tariffs are necessary to safeguard America’s national security and economic interests by onshoring critical aluminum production," he added.

 

Pittsburgh-based Alcoa, which produces aluminium in Canada, Iceland, Australia and elsewhere, had reduced its output in the US in recent years partly due to electricity costs.

 

The tariffs alone would not be enough to entice Alcoa to restart some of its idled US facilities, he stated, adding Trump officials have asked the company to do that.

 

"It's very hard to make an investment decision, even on something like a restart, without knowing how long the tariffs will last," Oplinger said.

 

The CEO stated that tariffs alone would not be sufficient to encourage Alcoa to reopen some of its closed US facilities, despite requests from Trump officials to do so.

 

"It's very hard to make an investment decision, even on something like a restart, without knowing how long the tariffs will last," Oplinger enunciated. He also said he had lobbied Trump officials for an exemption on Canadian aluminium imports.

 

Alcoa would consider boosting US output if the country could enable a lower-priced power supply, which Alcoa's now Icelandic operations enjoyed, Oplinger said. Aluminium smelting consumes large amounts of electricity.

 

Simultaneously, Oplinger expressed his belief that if the conflict between Ukraine and Russia comes to an end, aluminium from Russia could begin to flow into Europe.

 

He also mentioned that there are opportunities for consolidation in the global aluminium market, although he did not provide specific details on this matter.