US Aluminum Market 2025: Tariffs, Supply Chains, and What Buyers Need to Know

Tariff Impact on Sourcing Cost

Demand Rebounds in 2024

North American aluminum mill product demand totaled 26,969 million pounds in 2024, up from 26,087 million pounds in 2023 - a 3.4% year-over-year increase (Aluminum Association, 2024). Exports of aluminum ingot and mill products increased 12.8% in the same period, reflecting both improving domestic production and international demand. The aerospace segment drove a disproportionate share of the recovery, as commercial aircraft build rates returned toward pre-2020 levels and defense production accelerated.

The Section 232 Tariff Reset

On February 10, 2025, President Trump signed a proclamation restoring Section 232 aluminum tariffs to 25% on imports from all countries, eliminating the alternative arrangements that had given Canada, the EU, the UK, Australia, and others preferential rates (Federal Register, February 18, 2025). The proclamation was immediate and comprehensive: there are no longer any country-specific exemptions or quota arrangements. Canada had previously supplied 56% of US primary aluminum imports (USGS, 2025) - that volume now carries the full 25% duty. The downstream effect on mill and plate pricing was rapid.

Midwest Premium Reaches Record Levels

The Midwest aluminum premium - the regional surcharge above the LME aluminum price that reflects US supply-demand dynamics and import costs - hit $0.9030 per pound in December 2025, the highest level ever recorded (S&P Global, December 2025). Combined LME plus Midwest premium all-in delivered cost exceeded $4,000 per metric ton by late 2025. For buyers accustomed to the $0.20 to $0.30 Midwest premiums of 2022 and 2023, this is a fundamental shift in the cost structure of US aluminum procurement. Every purchase order for domestic aluminum now carries this premium embedded in the price.

Why Domestic Production Cannot Fill the Gap

US primary aluminum smelter capacity stood at 1.36 million tons per year in 2024, unchanged from 2023, with only four smelters operating across four states and capacity utilization at just 52% (USGS Mineral Commodity Summaries, 2025). Primary aluminum production actually decreased 11% in 2024. The US does not have the smelting capacity to replace Canadian primary aluminum - that capacity would take years and billions of capital to build. Secondary aluminum (recovered from scrap) was equivalent to approximately 37% of US apparent consumption in 2024, but aerospace plate requires primary metal to certified chemistry, which scrap-based production cannot reliably provide.

DFARS Thresholds Are Tightening

DFARS 252.225-7001 domestic content requirements are on a scheduled escalation: deliveries in 2024 through 2028 require 65% domestic content by cost; that threshold rises to 75% starting in 2029. Combined with the 25% Section 232 tariff on all imports, DFARS-compliant domestic material is becoming relatively more cost-competitive versus any-origin material than it was two years ago. The tariff narrows the landed cost gap between domestic and offshore-melt aluminum - which had previously been the primary argument for any-origin sourcing.

What This Means for Aerospace and Defense Procurement

For buyers under DFARS obligations, the 2025 tariff environment reduces the cost penalty for domestic-origin material and increases the strategic value of established domestic supplier relationships. For buyers on commercial programs without DFARS requirements, the same tariffs raise the floor on all aluminum pricing regardless of origin. Planning with buffer on material cost and lead time is more important in this environment than it was in 2022 or 2023. Global aerospace aluminum alloys market is valued at $4.78 billion in 2024 and projected to reach $8.16 billion by 2032 at a 6.8% CAGR (Reports and Data, 2024) - the demand trajectory is up regardless of tariff policy.