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The Aluminium Federation (ALFED) has today confirmed that the 25% US tariffs on aluminium imports have officially come into force. This development presents an immediate and significant challenge for the UK aluminium sector, one of the country's most critical manufacturing industries. Adding to this concern, the European Union's recently introduced counter-measures further heighten the threat of trade diversion, placing the UK at risk of becoming a destination for redirected aluminium products.
Significant Risks to Trade and Domestic Stability
The US is one of the UK’s largest export markets, accounting for 10% of all aluminium exports in 2024, valued at around £225 million. The introduction of these tariffs not only threatens vital trade relationships but also risks destabilising UK aluminium producers who are already facing pressures from high energy costs and regulatory complexities.
Some ALFED members have already reported a slowdown in US orders, with concerns over potential contract losses. Additionally, the sharp rise in US Midwest aluminium premiums is encouraging increased exports of UK aluminium scrap. This poses a risk of significant domestic scrap leakage, undermining the UK’s recycling infrastructure and long-term sustainability objectives.
Heightened Risk of Trade Diversion Following EU Countermeasures
The introduction of counter-measures by the European Union has heightened the threat of trade diversion. With the EU market now restricted, the UK faces the risk of becoming a destination for aluminium products that can no longer enter the US or EU. This could result in an influx of lower-cost imports, creating an uneven playing field and destabilising domestic producers already contending with cost pressures.
ALFED CEO Nadine Bloxsome commented:
"The enforcement of US tariffs today is a critical moment for the UK aluminium industry. While the direct impacts are already being felt through reduced US orders and scrap export pressures, the additional risk of trade diversion due to EU countermeasures creates an even more serious challenge. We are concerned that without proactive safeguarding, the UK could face an influx of low-cost imports, threatening the competitiveness and stability of our domestic market."
"We welcome the fact that the Government has called on ALFED for support and information throughout this process. It is reassuring that any decisions will be made in full consultation with the industry. While the current non-retaliatory approach is understood, this is a fastmoving situation. ALFED will continue to provide real-time feedback and insights to ensure any future decisions are informed by accurate data and industry realities."
Working with Government and Supporting Members
ALFED is in ongoing discussions with the Department for Business and Trade (DBT) and Minister Sarah Jones to monitor the situation and provide detailed industry insights. While the UK Government has chosen not to implement immediate counter-tariffs, it is prioritising dialogue with US counterparts to find a diplomatic resolution.
ALFED encourages all members to share any challenges they are facing as a result of these tariffs and trade divergence risks. These insights are vital for informing Government discussions and ensuring that the UK aluminium sector's interests are fully represented. Members can contact ALFED directly via alfed@alfed.org.uk to share their experiences.
Proposing an Aluminium Alliance
In light of these pressures, ALFED is also calling for the creation of an Aluminium Alliance - a strategic framework similar to the UK’s Steel Council. This Alliance would bring together industry leaders, policymakers, and stakeholders to collaboratively address challenges, identify opportunities, and ensure the sector's long-term resilience and growth. "Aluminium is a cornerstone of the UK’s manufacturing and sustainability ambitions. An Aluminium Alliance would provide a dedicated, strategic approach to securing long-term investment and enhancing the sector's global competitiveness," Bloxsome added.
Ongoing Commitment
ALFED remains committed to supporting its members and protecting the integrity of the UK aluminium supply chain. The Federation will continue to engage with government and industry stakeholders, providing data and insights that help shape effective trade and safeguarding policies.