The Impact of Sino-US Trade Friction on Aluminum Exports
- Decline in export market share to the United States
The United States has imposed tariffs on Chinese aluminum since 2018, which has impacted China’s aluminum exports to the United States. During the period of 2018-2023, the total imports from China to the United States fell by about 9.9 percentage points, and the share of Chinese aluminum in the US market declined.
In 2024, the United States further raised the tariff on aluminum products to 25% and expanded the tariff list to cover almost all aluminum processed materials. This makes China’s aluminum exports to the United States face higher costs and stricter restrictions. In the first quarter of 2024, only 67,000 tons of unwrought aluminum and aluminum products were exported to the United States, accounting for 4.5% of the total export volume.
If the US tariff rate on Chinese aluminum and aluminum products is further increased to 35%, 48% or 60% in 2025, it is expected that the impact on the total export consumption of aluminum will be 132,000 tons, 162,000 tons and 210,000 tons respectively, and the corresponding impact on the export of aluminum elements will account for 0.31%-0.49% of the total consumption.
- Accelerated diversification of export markets
Despite the obstruction of exports to the United States, Chinese aluminum export enterprises are actively exploring other overseas markets, such as Asia, Europe, South America and other regions, and the trend of export market diversification is obvious. From January to September 2024, China’s cumulative aluminum production reached 50.355 million tons, an increase of 8.0% year-on-year, of which exports accounted for about 9.2%, indicating that China’s aluminum exports in other global markets still maintained a certain growth.
- Increased export costs
The increase in US tariffs and China’s cancellation of the aluminum export tax rebate policy have increased the export costs of enterprises. Enterprises need to optimize in the procurement of raw materials, production and processing, logistics and transportation to reduce costs, while also dealing with the risk of price fluctuations. In order to maintain market share, enterprises have to absorb part of the tariff costs on their own, which compresses profit margins. Moreover, trade frictions have blocked some raw material supply channels, and enterprises need to find alternative suppliers, which increases the cost of raw material procurement and supply risks.
- Intensified industrial competition
Trade frictions have put Chinese aluminum export enterprises under greater market competition pressure. On the one hand, the US market’s demand for Chinese aluminum has decreased, resulting in a decline in orders for some companies; on the other hand, aluminum companies in other countries have taken the opportunity to seize US market share, further intensifying competition in the global aluminum market.
Under the impact of trade frictions, some small and medium-sized enterprises with weaker competitiveness may face operating difficulties or even be eliminated, while large companies, relying on their scale advantages, technical strength and brand influence, further consolidate their market share by optimizing product structure and improving product quality, and the aluminum extrusion profile industry reshuffle is accelerating.
