(Reuters) – Alcoa said on Wednesday it expects U.S. tariffs on aluminum imports from Canada to cost the company about $90 million in the current quarter. Since his inauguration in January, U.S. President Donald Trump has announced – and sometimes reversed – tariffs on a slew of products and countries. The duties levied on aluminum […]
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Alcoa expects $90 million tariff hit in second quarter, sees duties on China raising annual costs
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(Reuters) – Alcoa said on Wednesday it expects U.S. tariffs on aluminum imports from Canada to cost the company about $90 million in the current quarter.
Since his inauguration in January, U.S. President Donald Trump has announced – and sometimes reversed – tariffs on a slew of products and countries. The duties levied on aluminum imports currently stand at 25%.
“Approximately 70% of our aluminum produced in Canada is destined for U.S. customers and is now subject to 25% tariff costs … Currently the net annual result is approximately $100 million negative for our business,” CEO William Oplinger said during a post-earnings conference call.
The aluminum producer said the tariffs on Canadian imports had cost the company roughly $20 million in the first quarter, ended March 31.
Alcoa sources a portion of its input materials from Chinese suppliers, and expects the high U.S. tariffs on the country to hike up its annual costs by $10 million to $15 million “as there are no suitable replacement suppliers”.
Talking about current U.S. production capacity, Oplinger said that even if all idle smelting capacity were to restart, the country would still face a shortfall of 3.6 million metric tons.
“Until additional smelting capacity is built in the U.S., the most efficient aluminum supply chain is Canadian aluminum flowing into the country,” Oplinger added.
(Reporting by Mrinalika Roy in Bengaluru; Editing by Mohammed Safi Shamsi)