President Donald Trump has directed the Commerce Department to establish an incentive program aimed at encouraging companies to build, expand or refurbish aluminum smelters in the United States.
Trump signed a proclamation invoking Section 232 of the Trade Expansion Act of 1962, citing the national security risks associated with U.S. dependence on imported aluminum. The White House said the measure was designed to attract new investment and increase domestic primary aluminum production.
Under the program, companies will be invited to submit plans outlining investments in U.S. smelting capacity. Businesses whose proposals are approved will be permitted to import a corresponding amount of primary aluminum at a reduced tariff rate equal to half the otherwise applicable Section 232 rate.
The Commerce secretary will oversee approved projects and monitor whether companies meet their investment commitments. The administration may suspend or revoke tariff benefits—including retroactively—if a participating company fails to fulfill the terms of its plan.
The White House described aluminum as an essential material for U.S. defense and strategic industries. Primary aluminum and advanced aluminum alloys are used in armored vehicles, naval vessels, spacecraft and missiles, among other products.
According to the administration, U.S. demand for primary aluminum currently exceeds the production capacity of domestic smelters. The incentive program is intended to address that shortfall by linking tariff relief to investment in new or upgraded U.S. facilities.
The proclamation expands Trump’s use of Section 232 measures to support industries considered important to national and economic security. The administration has previously imposed or strengthened trade restrictions covering products including steel, aluminum, copper, automobiles, trucks, timber, lumber and pharmaceuticals.
Publicly traded companies with exposure to the U.S. aluminum industry include Alcoa (NYSE: AA), Kaiser Aluminum (NASDAQ: KALU) and Century Aluminum (NASDAQ: CENX).
