"It's something we are considering," a U.S. official said, but noted that the announcement about any tariff increase is not expected this week as there have been concerns in the administration about collateral damage to U.S. industries, including aerospace and automobiles. (Related: Biden preparing to tank US manufacturing with ban on importation of all Russian aluminum.)
According to Bloomberg, the move is aimed at Russia because Moscow has been dumping supplies on the U.S. market and harming American companies.
Russia is the world's second-largest producer of metal after China, accounting for about six percent of global output, which was estimated at 70 million tons last year. The London Metal Exchange (LME) aluminum prices initially gained as much as 0.6 percent following the announcement, before declining 1.7 percent to $2,526.50 a metric ton as of 3:25 p.m. London time.
The upsurge in pressure on Russia came after the White House unleashed sanctions to punish and isolate President Vladimir Putin's government. Biden's regime froze Moscow's central bank assets globally, targeting its banking, technology and defense sectors and sanctioning individuals linked to the Russian president.
The said move of taxing Russian-made aluminum is in line with the West's efforts to blunt Russia's role as a global commodities powerhouse. The European Union already banned imports of Russian oil, gas and fuels to cut its reliance on Moscow. But there is no indication yet that the bloc will resort to a similar move on Russian aluminum.
The White House National Security Council didn’t immediately respond to requests for comment.
Tariffs on Russian aluminum to have a "small" impact on the global market
The Aluminum Association, a trade group that represents the industry in the U.S., said in a statement that "the aluminum industry stands in support of any and all efforts deemed necessary by the U.S. government and its NATO allies" to address Russia's invasion. According to the organization, it is a global security and humanitarian disaster that goes far beyond the interests of any single industry.
Analysts say that such a steep tariff would effectively end U.S. imports of the metal from Russia. While the country has traditionally accounted for 10 percent of total U.S. aluminum imports, the amount has declined to just more than three percent, according to trade data.
In October 2022, America's imports had dropped to near zero as the administration weighed a ban, worrying domestic buyers who didn’t want to be stuck with the material. Imports rebounded to 11,600 tons in November before easing back to 9,700 tons in January.
If Biden goes ahead to impose the tariff on Russian aluminum, experts say it will likely have a limited impact on the global market as the country is not a significant buyer of the said metal, which is used in a huge variety of products, including cans, foils, kitchen utensils, window frames, beer kegs and airplane parts.
Meanwhile, buyers in the U.S. had been discussing the potential of alternate supply in the event of a ban, tariff or sanction on Russian aluminum. Industry participants in recent months have also tried to game plan where Russian metal would go if it was suddenly blocked out of the U.S. market, as well as Europe, with many speculating that it could be transshipped via China or other countries and reexported, obscuring its origins.
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