U.S. aluminum buyers are facing record-high premiums as the effects of President Trump’s tariffs ripple through global markets. Since the start of 2025, the Midwest duty-paid aluminum premium has surged nearly 60%, now exceeding $900 per metric ton—a sharp contrast to Europe, where premiums have fallen more than 35% to around $230 per ton, their lowest in over a year. The U.S. Midwest premium has climbed to above 40 cents per pound, reflecting the market’s scramble for supply as tariffs restrict imports.
The divergence is a direct result of the new U.S. tariff regime. With a 25% levy on most imported aluminum—including shipments from Canada, Mexico, and the European Union—metal that would typically flow to the U.S. is now being redirected to other regions, particularly Europe. This has created a relative oversupply in European warehouses, driving down local premiums even as American consumers pay more. Physical market premiums in Europe have dropped as aluminum produced in countries facing U.S. import levies is diverted away from the U.S., pushing down regional prices.
For traders, the premium gap between the U.S. and Europe might seem to offer an arbitrage opportunity, but the reality is more complex. Shipping European aluminum to the U.S. means incurring the 25% tariff—adding about $600 per ton—on top of logistical hurdles and uncertainties in transport. This makes it difficult for traders to capitalize on the price difference, especially as U.S. tariffs are broad and loopholes are limited. Even with the higher U.S. premium, the math is tight once tariffs and shipping costs are factored in, and logistical challenges further complicate supply routes.
U.S. aluminum consumers, from beverage can makers to aerospace firms, are absorbing these higher costs with little immediate relief in sight. Domestic production, which has been in decline for decades, cannot ramp up quickly enough to meet demand. Meanwhile, the only major supplier not subject to the new tariffs is the United Arab Emirates, which now accounts for about 11% of U.S. aluminum imports. As a result, some American buyers are turning to UAE metal as they seek alternatives to more expensive or tariffed sources.
Looking ahead, elevated U.S. aluminum premiums are likely to persist as long as tariffs remain in place and domestic capacity lags behind demand. While some relief could eventually come from market adjustments or policy negotiations—such as ongoing talks between the U.S. and the EU—businesses are preparing for sustained volatility and cost pressure in the months ahead.
