U.S. Aluminum: Tariff Relief Tied to Domestic Capacity Expansion

Research evidence excerpt

U.S. Aluminum: Tariff Relief Tied to Domestic Capacity Expansion

Update

July 20, 2026 11:33 PM GMT

Morgan Stanley & Co. LLCMMetals & Mining | North America Carlos De Alba

Equity Analyst

U.S. Aluminum: Tariff Relief Tied Carlos.De.Alba@morganstanley.comJustin A Ferrer +1 212 761-4927

Research Associate

Justin.Ferrer@morganstanley.com +1 212 761-5246

to Domestic Capacity Expansion Morgan Stanley C.T.V.M. S.A.+

Henrique Braga

What’s new? The White House has introduced a new tariff incentive designed to Research Associate

encourage investment in U.S. primary aluminum smelting. Companies that receive Henrique.Braga@morganstanley.com +55 11 3048-6198

Commerce approval for a new smelter, an expansion, or the refurbishment of an Morgan Stanley & Co. LLC

existing facility could import primary aluminum volumes broadly matching the Claudia I Pinedo

project’s planned annual capacity at 50% of the normal Section 232 tariff rate. For Claudia.Pinedo@morganstanley.com +1 212 296-3101

refurbishment projects, the value of the tariff benefit would be capped by the

Metals & Mining

amount invested, rather than tied to the facility’s total production capacity.

North America

Industry View In-Line

Construction must begin by January 20, 2029, and participating companies would be

required to meet agreed development milestones and reporting requirements. The

measure is targeted, rather than a broad reduction in aluminum tariffs, and key

details including the application process, timing and duration of the benefit, and

customs procedures, still need to be issued by Commerce.

Moreover, the White House also announced an increase in tariffs on imports from

Canada. However, products already subject to Section 232 tariffs —like aluminum—

will not be impacted by these additional Canadian tariffs.