Alcoa's CEO William Oplinger stated on Thursday that should the United States impose tariffs on Canadian imports, the company is likely to redirect its Australian output to the U.S.
President Donald Trump's tariff threats towards countries, even close allies like Canada and Mexico, could disrupt shipping routes, potentially increasing costs for global consumers.
Oplinger told Reuters, "We would be optimizing our global system based on any new tariff structures... there is a potential for metal to come out of Australia and go into the U.S. if there is a massive tariff dislocation."
With an annual production of 2.2 million metric tons of aluminum, of which 900,000 metric tons are from Canada, the majority of which is shipped to the United States.
Trump mentioned considering imposing tariffs on imports from Canada and Mexico by February 1.
Alcoa would likely redirect its Canadian-made aluminum to Europe to avoid potential tariffs, stated Oplinger.
In case of a 25% tariff on Canadian metal and a lower tariff on non-Canadian metal, Oplinger noted that metal from the Middle East and India could be attracted to the U.S.
Oplinger estimated that any potential tariff could add $1.5 to $2 billion in costs for U.S. aluminum consumers, affecting industries like packaging and automotive the most.
Alcoa's primary market for low-carbon aluminum remains Europe, where almost half of the produced material is shipped.
Utilizing clean energy like hydropower to produce aluminum allows producers to charge a premium, as manufacturers can earn more carbon credits using green aluminum.
Alcoa applies a 1% premium, ranging from $20 to $40 per ton, due to an oversupply compared to demand for low-carbon aluminum.
Oplinger believes that by the end of the decade, as demand surpasses supply, premiums for low-carbon aluminum will rise.