Source: EconLog
by Pierre Lemieux
“The new tariff or tax will hit imported aluminum (primary aluminum from smelters and recycled aluminum, in the form of ingots, slabs, billets, and sows, plus some derivative products such as extrusions) and will, as is typically the case, be totally or mostly paid by the buyers of imported aluminum. Only a small proportion of the global production of aluminum is purchased by Americans, so a reduction in domestic demand following the tariff is unlikely to affect world prices significantly; in other words, foreign aluminum producers will not ‘eat’ the American tariff. American consumers will ultimately pay it in the increased prices of their manufactured goods containing aluminum such as automobiles, windows, and beer cans. This the more obvious as the new tariff applies to imports from all countries. In fact, the bidding up of the aluminum price started on the American market as soon as the tariff was announced.” (02/28/25)