Week in Review: Tariff whiplash

This week was another rollercoaster in the aluminum and scrap industries, with tariffs once again front and center. The back-and-forth on trade policy has left buyers, producers, and traders scrambling to keep up with shifting enforcement timelines and new restrictions.

Tariffs take effect, for now

On March 4, the U.S. moved forward with a 25% tariff on aluminum and steel imports from Canada and Mexico, only to immediately follow up with new exemptions and delays on specific products. The policy reversals have been nonstop, making it tough to gauge what the long-term impact will be. As Greg wrote in his article, Tariff turmoil: The ever-changing playbook, the biggest issue right now is the added scrutiny around USMCA rules of origin, which could reshape supply chains, particularly for aluminum entering from Mexico.

USMCA under the microscope

The administration’s latest trade moves are putting more pressure on companies to prove their materials meet USMCA’s rules of origin. For aluminum, that means questions around whether Chinese metal is being processed in Mexico before entering the U.S. without facing duties. Enforcement of these rules has been inconsistent since USMCA took effect, but that could change fast. If the U.S. pushes for stricter enforcement, we could see major shifts in sourcing and supply chain decisions.

Market reaction: Pricing and premiums in flux

With all the uncertainty, aluminum markets saw some price movement this week. Backwardation in LME pricing is still holding, signaling tightness in available supply, but the real story is the impact on Midwest premiums. If the U.S. moves forward with more aggressive tariffs, especially on Canada, premiums could shoot up, potentially hitting levels not seen in years.

What’s next?

March 12 is the next big date to watch, with potential tariff adjustments still on the table. And with Mexico getting a one-month reprieve, there’s still time for more negotiations, or more trade drama. For now, producers, recyclers, and buyers alike are trying to read between the lines and figure out what’s coming next.