Introduction
Aluminum—a lightweight, ductile, malleable, and corrosion-resistant metal—is used in a wide variety of consumer, industrial, and technological goods, including food packaging, aircraft, building materials, motor vehicles, and many types of military equipment.
In recent years, some observers have raised concerns about the fall in the domestic production of aluminum. In 2025, the U.S. Geological Survey estimated that the United States relied on imported aluminum—mainly from Canada (56% of imports), the United Arab Emirates (UAE; 8%), Bahrain (4%), and the People’s Republic of China (China; 3%)—for 60% of its consumption.1 In addition, the domestic production of certain aluminum products needed for national security takes place in few locations. This may pose risks to national security if any single site were to experience an unplanned outage.
Some U.S. aluminum producers have claimed that recent changes in U.S. tariff policies contributed to their decisions to invest in expanding domestic production capacity. These tariff policies—alongside disruptions in international trade, such as the drop in ship traffic through the Strait of Hormuz—have contributed to increases in the domestic price of aluminum. High domestic aluminum prices benefit domestic aluminum makers. Observers have noted that the high cost of aluminum also may negatively affect consumers and industries that use aluminum. Members of Congress might consider whether and, if so, how they might assess or negotiate the emerging tension between supply chain resilience and the cost of domestic production borne by consumers and industries that use aluminum.
This report provides an overview of aluminum production in the United States and factors affecting its price. The report then discusses selected issues that may be of interest to Congress and some policy options.
Aluminum Manufacturing
Aluminum production occurs through two types of processes:
- Primary production yields aluminum by dissolving alumina—a chemical compound made from refining bauxite—using an electric current. Aluminum made from primary production can be further refined to achieve a higher concentration of elemental aluminum than is possible through secondary production.
- Secondary production yields aluminum by melting scrap metal. The scrap may be old and recovered from consumer or industrial products, such as cans and auto parts. It may also be new scrap left over from processing aluminum into consumer or industrial products.
Aluminum made from these two processes is called unwrought aluminum. Aluminum mills extrude, roll, and mechanically process unwrought aluminum into desired shapes such as sheets, tubes, and foil2 that are then referred to as wrought aluminum. Unwrought aluminum may also be melted and cast into shapes. Cast and wrought aluminum are also referred to as semi–fabricated products.3 Producers of semi-fabricated products in the United States accounted for about 75% of the domestic aluminum industry’s $41.1 billion sales in 2024.4
Semi-fabricated products are used in the manufacture of consumer, industrial, and defense products.5 Figure 1 depicts this supply chain.
Figure 1. Aluminum Manufacturing Supply Chain
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Source: Figure created by CRS from Jeffrey E. Eisenach et al., “Impacts of Potential Aluminum Tariffs on the U.S. Economy,” NERA Economic Consulting, June 2017, p. 1.
Domestic Primary Aluminum Production
In 2000, the United States ranked as the world’s top producer of primary aluminum. Domestic primary aluminum production began decreasing thereafter (see Figure 2). In 2025, the United States produced 660,000 metric tons of primary aluminum, below a previous domestic output peak of 4.7 million metric tons in 1980 and the lowest level recorded since 1950.6 Currently, it is not among the top 10 producers and accounts for less than 1% of global primary aluminum production.7
A contributing factor to the decline in U.S. primary aluminum production is competition from countries that have lower energy costs than the United States. Primary aluminum production is energy-intensive, with electricity estimated to account for up to 40% of the cost.8 In 2025, U.S.-headquartered aluminum producer Alcoa reported that electric power represented approximately 24% of the company’s primary aluminum production costs.9 U.S.-headquartered Century Aluminum cited electricity as one of the company’s largest operating costs and attributed the closure of its primary aluminum facility (or smelter) in Hawesville, KY, directly to an increase in such costs.10 Generally, countries with the largest aluminum sectors include those with lower energy costs than the United States, such as Canada, Russia, and the UAE. According to the World Bank, one kilowatt-hour of electricity cost, on average, $0.181 in the United States in 2019 compared with $0.123 in Canada, $0.084 in Russia, and $0.109 in the UAE.11 A May 2025 report from The Aluminum Association—an industry trade group representing U.S.- and foreign-based aluminum producers, including Alcoa, and providers of services to the aluminum industry—noted that U.S. aluminum producers pay between $32 and $46 more per megawatt-hour compared with Canadian counterparts.12
As domestic primary aluminum production has decreased, so has the number of active smelters in the United States. In 2000, 12 companies operated 23 primary smelting facilities in the United States.13 As of October 2026, two companies—Alcoa and Century Aluminum—each operate two primary smelters that actively produce aluminum (see Figure 3).14 The total production capacity across these four smelters is about 795,000 metric tons per year. Figure 3 also shows three facilities that were shut down in recent years—one by each of Alcoa, Century Aluminum, and Magnitude 7 Metals—and their most recent status.
Figure 3. U.S. Primary Aluminum Smelters, October 2026
Annual production capacity in metric tons (MT)
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Source: Figure created by CRS using locations of smelters obtained from Homeland Infrastructure Foundation-Level Data, Nonferrous Metal Processing Plants dataset. Data for smelter production capacities are based on Alcoa Corporation, Form 10-K for the Year Ending December 31, 2025, p. 5; Century Aluminum Company, Form 10-K for the Year Ending December 31, 2025, p. 2; and “Aluminum” in U.S. Geological Survey, Mineral Commodity Summaries 2019, February 2019, p. 1. See also Century Aluminum, “New Digital Infrastructure Campus to Be Built at Hawesville,” press release, February 2, 2026, https://centuryaluminum.com/insights/hawesville-redevelopment/.
Notes: Alaska and Hawaii are not shown on the map; no primary smelters are located in either state. This map is a snapshot of smelter status as of June 2026. Alcoa and Century Aluminum are U.S.-based companies that own and operate primary aluminum smelters. U.S.-based company Magnitude 7 Metals owns one primary aluminum smelter in New Madrid, MO, that ceased operations in 2024. In July 2026, the company announced plans to restart part of the facility.
Generally, U.S. primary smelters use older, less energy-efficient technologies than facilities abroad. The newest U.S. primary aluminum facility is Century Aluminum’s smelter in Mt. Holly, SC, which opened in 1980.15
Construction of a new primary smelter requires a capital investment of at least $1 billion and may take a minimum of three years to build and bring online.16 Tariff increases, global supply chain disruptions, and availability of federal funding may contribute to the construction of new primary smelters or expansion of an existing facility (see text box, below).
Planned Expansions in Domestic Primary Aluminum Capacity
Some companies have announced plans to expand primary aluminum smelting capacity in the United States.
On January 26, 2026, Century Aluminum announced plans to jointly construct a primary aluminum production plant in Inola, OK, with the United Arab Emirates-headquartered Emirates Global Aluminum (EGA).17 Century Aluminum expected to start construction by the end of 2026. The planned smelter in Inola is projected to have a total capacity of 750,000 metric tons per year. If completed, this smelter would increase total U.S. active smelter capacity by about 94%.18 Some reporting suggests that the total cost of the planned investment is $4 billion.19
In January 2025, the U.S. Department of Energy (DOE) obligated $500 million to Century Aluminum as part of an earlier Industrial Demonstrations Program (IDP) award to construct a new primary smelter.20 A DOE press release issued on February 10, 2026, stated that the IDP award would support the joint project between Century Aluminum and EGA in Inola.21 The companies have also referenced tariff increases and global supply chain risks as contributing factors to their decision to make the investment.22
The planned project in Inola has received local criticism and support. On June 2, 2026, Oklahoma Attorney General Gentner Drummond filed a petition with the local district court to block the smelter project at Inola from moving forward.23 The petition raised concerns regarding the foreign ownership of EGA, pollution, and other factors. Oklahoma Governor Kevin Stitt released a public video supporting the project after the petition was filed.24
In July 2026, Magnitude 7 Metals announced plans to restart production at its idle smelter in New Madrid, MO, and produce 75,000 metric tons of primary aluminum per year.25 This effort would increase active domestic smelting capacity by about 9%. A representative of Magnitude 7 Metals reportedly stated, “President Trump’s 50% aluminum tariff has created the conditions” for the company’s investments to restart the New Madrid smelter.26
Federal investments have also supported projects that propose to expand the domestic production of alumina, a key input for primary aluminum production. According to the U.S. Geological Survey, the United States has had a net import reliance of 71% for alumina.27 Domestic refining of alumina takes place at a single facility operated by Atlantic Alumina (Atalco) in Gramercy, LA, that produced approximately 710,000 metric tons in 2025.28 In January 2026, Atalco announced a $450 million strategic partnership with the U.S. Department of Defense (which is “using a secondary Department of War designation” under Executive Order 14347 of September 5, 2025) to expand domestic production of alumina and gallium at its refinery in Gramercy.29 Through this expansion, Atalco anticipates production to increase to over one million metric tons of alumina per year,30 which would support potential expansions of domestic primary aluminum production.
Domestic Secondary Aluminum Production
Since the 2000s, most unwrought aluminum production in the United States has been secondary aluminum (see Figure 2). Unlike primary production, secondary aluminum production in the United States has increased overall since the early 1980s; in 2025, it was over twice the level of production in 1985.31 However, from 2000 to 2025, production fluctuated and was about the same level in 2000 and 2025.
Secondary aluminum producers face a different cost structure from primary producers. Notably, secondary production is roughly 95% less energy-intensive than primary production,32 and the capital cost of secondary production is comparatively low.
Secondary aluminum accounted for 85% of the 4.3 million metric tons of unwrought aluminum produced by U.S. smelters in 2025. Of that secondary production, 56% came from new scrap, which is generally excess material generated by aluminum product manufacturers, and 44% came from old scrap, which is generally post-consumer or post-industrial scrap.33
According to The Aluminum Association, “a recycled aluminum beverage can, car door, or window frame is often recycled directly back into itself.”34 The Aluminum Association highlighted the value of certain types of post-consumer scrap materials—such as used beverage containers—for secondary aluminum production due to their ease of collection and readiness for smelting.35 The trade group noted that increased recycling of these scrap materials could grow domestic secondary aluminum production and related employment.36
Post-consumer aluminum scrap sometimes requires separation and processing to become usable by smelters. Some industry observers have noted that emerging technologies may improve aluminum recovery and lower costs for smelters looking to utilize certain types of post-consumer scrap.37 Generally, the mixing of different aluminum scrap products, as well as the presence of other materials in aluminum scrap, can contribute to secondary aluminum sometimes having lower purity levels than primary aluminum. Secondary aluminum sometimes goes through additional processing to achieve higher purity levels. One method for secondary aluminum to reach higher purity is by mixing it with primary aluminum.
Some industrial and consumer product manufacturers have performance requirements that limit the use of secondary aluminum. For example, certain aerospace components require aluminum alloys with a specific chemical composition that can be more predictably refined from primary aluminum than from secondary aluminum.
Applications of Aluminum
Many parts of the U.S. economy rely on aluminum. Consumer products that utilize aluminum include canned beverages, automotive vehicles, and home appliances. Industry also relies on products containing aluminum, from electrical transformers to machinery. Manufacturers of hardware with military applications, such as aircraft and munitions, also use aluminum. The section below addresses selected trends among users of aluminum, including current demand and emerging bottlenecks.
Consumer and Industrial Goods
Consumption of aluminum fluctuates (Figure 4) and partly depends on the state of the manufacturing sector. The three largest domestic markets for aluminum in 2025 were transportation equipment, packaging, and building and construction. These markets accounted for a combined 73% of U.S. aluminum consumption in 2025.38 Another leading form of U.S.-smelted aluminum product is new scrap, which is sometimes exported and subsequently manufactured into aluminum products in foreign countries.
Figure 4. U.S. Aluminum Production and Apparent Consumption
2000-2025
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Source: CRS calculations using data and methods from the U.S. Geological Survey (USGS). USGS, Aluminum – Historical Statistics (Data Series 140); and “Aluminum” in USGS, Mineral Commodity Summaries 2026, February 2026.
Notes: Production and apparent consumption include primary and secondary aluminum. As defined by USGS, apparent consumption = primary production + secondary production from old scrap + imports – exports + changes in aluminum inventories. The year 2000 was chosen as the starting year for consistency with Figure 2. Figure 2 shows “total production,” reflected in Figure 4 as “production.”
Changes in future aluminum consumption are unclear. Publicly available forecasts are based on projected growth in certain manufacturing industries.39 The U.S. food and beverage manufacturing subsectors could drive growth in U.S. aluminum consumption. These two subsectors are projected by the U.S. Bureau of Labor Statistics to contribute the largest number of new U.S. manufacturing jobs from 2024 to 2034.40 According to the latest available figures from the Bureau of Economic Analysis, the two subsectors together consumed about half of the metal cans and containers produced in the United States in 2017.41 The battery manufacturing industry—which consumes aluminum and would, according to some analysts, experience growth in response to demand from electric vehicle manufacturing—could also contribute to the growth of aluminum demand.42 Construction growth could also contribute to increased aluminum consumption, as semi-fabricated products are used to construct buildings and other infrastructures. In contrast, reduced production by aluminum-consuming industries could contribute to reduced aluminum consumption.
Some commentators expect global demand for semi-fabricated aluminum products to increase by up to 80% by 2050.43 This could be a positive development for U.S. producers. Moreover, the United States-Mexico-Canada Agreement, in effect since July 2020, requires 70% North American aluminum content for automobiles and auto parts to qualify for exemption from certain duties.44 This may also drive demand for U.S.-made semi-fabricated products.
Defense Products
Many products with military applications (e.g., aircraft frames, shell casings, and explosive chemical compounds) use aluminum. Manufacturers of products with military applications often favor the use of primary aluminum, which allows them to manufacture alloys with predictable chemical composition and properties that satisfy DOD specifications.45
Many defense products use high purity aluminum (HPA), which is made by eliminating impurities in primary aluminum.46 According to a 2018 investigation by the U.S. Department of Commerce (DOC), U.S. manufacturers required about 250,000 metric tons of HPA per year, 10% of which supported production of defense-related materials.47 The Bureau of Industry and Security, a DOC agency, assessed in 2018 that the United States was “at risk of becoming completely reliant” on foreign producers of HPA because of limited U.S. production.48
A few domestic facilities currently produce HPA. A facility owned by the company Arconic in Davenport, IA, employs a process called fractional crystallization to produce HPA using purchased aluminum ingots. In 2025, the site could produce 43,000 metric tons of HPA per year.49 A facility operated by C-KOE near Dallas, TX, also produces HPA using purchased aluminum ingots.50 The planned construction of the primary aluminum smelter in Inola, OK (see text box, above), could expand annual HPA production capacity in the United States by 20,000 metric tons.51
Arconic achieved its current capacity to produce HPA by investing in a $57.5 million expansion of its facility, which was supported by a $45.5 million agreement with DOD under Title III of the Defense Production Act of 1950 (P.L. 81-774; 50 U.S.C. §§4501 et seq.).52 The U.S. government has made investments in other parts of the aluminum supply chain that were considered important for national security needs, including investments in the expansion of alumina production and aluminum casting.53
Aluminum Market
U.S. aluminum producers compete in a global aluminum market that is affected by factors such as global supply and U.S. trade policies. The interaction of these factors determines the availability and price of aluminum. This section discusses recent developments that have affected these factors.
Global Capacity
The global aluminum sector saw major changes over the last two decades as China became the leading producer of aluminum. China’s output of primary aluminum grew by approximately 1,631%, from 2.6 million metric tons in 2000 to 45 million metric tons in 2025, accounting for 60.6% of global primary aluminum output (see Figure 5).
In a 2019 study, Organisation for Economic Co-operation and Development (OECD) economists found that subsidies and other market-distorting practices, particularly in China and the countries of the Gulf Cooperation Council, contributed to excess capacity and impacted global competition in the aluminum sector.54 China has acknowledged that its aluminum sector, which is partly state-owned, exhibited signs of excess capacity and indicated as of 2019 that continued efforts to reduce inventory, cut overcapacity, and achieve a balance in supply and demand remain policy priorities.55
The OECD estimated that governments extended approximately $83 billion in support to primary aluminum producers between 2014 and 2024.56 Support measures included government grants, income tax concessions, and below-market loans. The OECD estimate did not include other forms of support that aluminum firms received from governments, notably subsidized energy prices.57 A 2019 OECD analysis showed that China was the largest provider of public subsidies between 2013 and 2017, accounting for over 92% of government support.58
In 2026, disruptions in the Strait of Hormuz have resulted in demand tending to exceed supply, which has contributed to higher aluminum prices.59 It is unclear whether this decrease in supply relative to demand will persist beyond 2026 or if the typical condition of global overcapacity will resume.
U.S. Aluminum Trade and Tariff Policy
U.S., Canadian, and Mexican aluminum markets are interconnected. More than half of U.S. aluminum imports in 2025 came from Canada.60 After Canada, the leading foreign suppliers of aluminum to the U.S. market included the UAE, Mexico, and South Korea (among others not listed).61 Mexico was the leading destination for U.S. export of aluminum in 2025, accounting for 17% of total aluminum exports. After Mexico, leading foreign buyers of U.S. aluminum included Thailand, India, and Canada (among others not listed). Scrap composed 72% of U.S. aluminum exports.
Section 232 of the Trade Expansion Act of 1962 (TEA)62 has been used to investigate and take action to adjust aluminum imports. Section 232 allows restrictions to be placed on imports that have been found to “threaten to impair” national security.63 The law states that when using this authority, the Secretary of Commerce and the President shall “recognize the close relation of the economic welfare of the Nation to our national security” and consider “the impact of foreign competition on the economic welfare of individual domestic industries.”64 In March 2018, the first Trump Administration used this authority to impose a 10% tariff on aluminum imports (but temporarily excluded aluminum imports from some countries, including Canada, Australia, and Brazil).65 Generally, the economic welfare, economic security,66 and national security of the United States were themes in DOC’s 2018 investigation that supported these Section 232 tariffs.67 This DOC investigation would go on to be cited in subsequent Section 232 actions.
In 2025, President Trump generally increased the Section 232 aluminum tariff rates and their coverage. Pursuant to a proclamation issued by President Trump in February 2025,68 imports of aluminum from “all countries” became subject to a Section 232 tariff, effective March 12, 2025.69 Additionally, President Trump increased the general Section 232 tariff rate on imports of aluminum to 25%,70 effective March 12, 2025, and then further increased the general Section 232 tariff rate on imports of aluminum to 50% for nearly all countries,71 effective June 4, 2025.72 Subsequently, President Trump made modifications to tariff rates on certain products and on imports from certain trading partners.73
Research indicates a range of potential effects from Section 232 aluminum tariffs. Some research analyzing Section 232 tariffs implemented by the first Trump Administration on steel and aluminum found that the immediate effect was an increase of tariff-inclusive U.S. import prices of those metals.74 Because imported aluminum and domestically produced aluminum are sometimes comparable substitutes to each other, higher import prices could result in higher prices and demand for domestically produced aluminum and thus potentially incentivize higher domestic production of aluminum.75 In March 2026, the chief executive officer (CEO) of Century Aluminum, a company that primarily produces its aluminum in the United States, stated that the “tariffs are working.”76 In January 2026, the CEO suggested that tariff increases were a contributing factor to increased aluminum production and capacity investments in the United States.77 The CEO of Alcoa, a company that maintains a majority of its aluminum production capacity outside the United States, reportedly said the company is responding to U.S. tariffs by shifting sales of foreign-produced aluminum to countries other than the United States rather than increasing domestic investments.78 A representative of Magnitude 7 Metals reportedly attributed the company’s decision to restart smelting capacity in the United States to the 50% aluminum tariffs.79
By increasing the price of aluminum, the tariffs may have also resulted in domestic manufacturers that use aluminum facing higher input costs. Consequently, some U.S. manufacturers claimed to have difficulty competing with imported finished or derivative products.80 Research from HARBOR Aluminum consultants on behalf of the trade association Beer Institute estimates that between March 2018 and February 2022, those Section 232 aluminum tariffs cost the U.S. beverage industry $1.4 billion.81 Others disagreed. A 2021 report from the Economic Policy Institute estimated that Section 232 measures in place during the first Trump Administration and the Biden Administration improved aluminum output, employment, and capital investments while creating no adverse effects for aluminum-consuming industries.82
Following the revision of the aluminum tariffs to 50% in 2025, some trade groups representing manufacturers that use aluminum raised concerns regarding the rising cost of aluminum.83 The trade association Can Manufacturers Institute noted that the combination of the increase in Section 232 tariffs to 50% and exclusion of filled beverage cans from these duties meant that manufacturers that use aluminum cans anticipated “even greater threat of injurious increases in filled beverage can imports in the near future.”84 The Brewers Association similarly commented that the current tariff arrangement impacted “already strained packaging processes.”85
Price Determination
Aluminum is a globally traded commodity, so its price is affected by global demand and supply. The balance between global demand and supply is reflected in the price of futures contracts traded on the London Metal Exchange (LME).86 The U.S. benchmark aluminum price, the Midwest price, establishes the base price of aluminum in the United States. This price is usually higher than the LME price, as it reflects the transportation cost of delivery to LME-approved warehouses in the United States, tariffs and other duties,87 supply chain conditions, and U.S. demand conditions. The difference between the LME and the Midwest price is called the Midwest Premium. For example, in October 2024, the LME price of primary aluminum was 117.840 cents per pound, and the Midwest price of aluminum was 136.848 cents per pound. The Midwest Premium was therefore around 19 cents per pound, or around 16% of the LME price.
For much of the 21st century, the Midwest Premium was relatively stable, and U.S. aluminum price variation was largely explained by global demand and supply changes reflected in the global LME price. Disruptions and frictions in global trade in the 2020s have somewhat weakened the link between global and U.S. aluminum prices. Price trends have diverged between U.S. and global markets as tariff increases and supply chain frictions—such as logistical bottlenecks during the COVID-19 pandemic—have erected barriers between global and U.S. markets for aluminum. This divergence between U.S. and global aluminum price trends is reflected in a higher Midwest Premium as a percent of LME price, which is shown alongside the estimated average effective duty percentage for aluminum in Figure 6. The data show a widening gap between U.S. and global aluminum prices (represented by the growth in aluminum Midwest Premium as a percent of LME) in 2025 that corresponds with increases in estimated average effective duties of aluminum imported to the United States. In December 2025, for example, the Midwest Premium was nearly 70% of the LME price.
Figure 6. Aluminum Midwest Premium as a Percentage of the London Metal Exchange Price and Estimated Average U.S. Duties
July 2019-December 2025
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Source: Figure created by CRS with data from the U.S. Geological Survey (USGS) and U.S. Census Bureau. USGS, National Minerals Information Center, “Aluminum Statistics and Information,” accessed June 11, 2026, https://www.usgs.gov/centers/national-minerals-information-center/aluminum-statistics-and-information; and U.S. Census Bureau, “USA Trade Online,” accessed June 11, 2026, https://usatrade.census.gov/.
Notes: Aluminum Midwest Premium Percent = (Midwest U.S. market price – London Metal Exchange [LME] Cash Price Grade A) ÷ LME Cash Price Grade A. Estimated Average Effective Duty Percent for Aluminum = Total Calculated Duty Estimate for Chapter 76 Imports ÷ Total Customs Value of Chapter 76 Imports. All underlying values for Aluminum Midwest Premium Percent were obtained from USGS. All underlying values for Estimated Average Effective Duty Percent were obtained from the U.S. Census Bureau. Chapter 76 refers to Chapter 76 of the Harmonized Tariff Schedule of the United States. The executive branch increased tariffs in 2025, including increases to aluminum imports specifically, which were announced in February and June 2025. Tariffs are a type of duty. July 2019 was chosen as the starting month to provide pre-COVID-19 context and because it is the furthest back that this data source is available. December 2025 was chosen as the ending month because it is the most recent month of data available from this source.
Increases in the Section 232 tariffs likely contributed to a higher Midwest Premium in 2025 (see Figure 6).88 Because tariffs add a cost on top of the market import price, they tend to increase the gap between the average tariff-inclusive U.S. price and the average global LME price (i.e., increase the Midwest Premium).
In 2026, supply chain disruptions contributed to increases in the LME price and potentially affected the Midwest Premium. Generally, disruptions in the Strait of Hormuz have affected the global supply of aluminum89 and contributed to increases in the LME price in 2026. On May 29, 2026, Bloomberg reported that global aluminum inventories tracked by major metal exchanges had fallen to “less than five” days’ worth of supply and that “supply is running short of demand.”90 Additionally, logistical frictions in the Strait of Hormuz could have increased the Midwest Premium in part because such frictions are reportedly increasing freight rates.91 Higher freight rates generally mean the cost to deliver aluminum to U.S. markets will be higher; if such delivery costs increase more than global averages, they could increase the Midwest Premium.
Selected Considerations for Congress
Ongoing global supply chain disruptions, tariff increases, and certain industrial policies of the United States have seemingly incentivized the expansion of domestic primary aluminum production capacity. This market condition might support supply chain resilience and reduce the likelihood of aluminum shortages in the United States. It could also contribute to a general increase in costs for aluminum-consuming manufacturers and consumers because the cost of producing aluminum—particularly, primary aluminum—in the United States is generally higher than in other aluminum-producing countries. Congress might consider whether and, if so, how it might negotiate the tension between supply chain resilience and private sector costs. Potential policy responses include consideration of public support for primary aluminum production, expansion of domestic scrap consumption, and funding of research and development (R&D). Additional actions may be taken regarding the Section 232 tariffs or other trade remedies,92 which other CRS reports have addressed.93 Congress may also take no action while continuing to monitor market responses to current events.
Public Support for Primary Aluminum Production
Congress could consider whether to support primary aluminum production by offering smelters financial resources, such as grants, tax credits, or other incentives. As discussed in “Domestic Primary Aluminum Production,” above, electricity represents a sizable share of primary aluminum production costs. Congress could assess whether to allocate funding for grants that would subsidize the acquisition and installation of new equipment that could improve primary aluminum smelters’ energy efficiency. An example of past legislation that created such a program is Section 50161 of the Inflation Reduction Act of 2022.94
In addition, Congress could evaluate whether to expand existing tax credits that manufacturers can access when investing in equipment such as on-site electricity generation capacity or power storage.95 An example of an existing tax credit is the Clean Electricity Investment Tax Credit (26 U.S.C. §48E). Smelters sourcing some of their energy needs through on-site solar panels or managing the purchase of electricity by using batteries may lower the costs of producing aluminum.96
These vehicles of public support may decrease federal government revenues or increase government expenditures. Depending on how the public support is structured, potential public financial support may additionally raise concerns in certain U.S. trade agreements as they relate to subsidies.97
Domestic Scrap Consumption
Another option to ease the potential tension between supply chain resilience and private sector costs could be to increase the domestic consumption of aluminum scrap. Currently, the United States exports a substantial amount of aluminum scrap. Policymakers could consider options that would increase the amount of U.S. aluminum scrap that is directed to U.S. secondary aluminum smelters, which may lower the costs of goods containing secondary aluminum.
One bill introduced in the 119th Congress—the CANS Act of 2026 (H.R. 7992, as introduced)—would direct the executive branch to study options to redirect would-be scrap exports back to domestic aluminum supply chains. Another bill—the Secure Aluminum Supply Chains Act (H.R. 9161, as introduced)—would direct the executive branch to study economic security risks posed by the export of aluminum scrap to certain countries and options to address such risks.
Generally, a policy that would limit U.S. aluminum scrap exports might reduce costs for U.S. aluminum smelters while decreasing revenues for U.S. entities that sell scrap, such as aluminum fabricators and recyclers. A policy that would subsidize (e.g., with consumption tax credits) U.S. smelters for purchasing U.S. scrap would increase demand for U.S. scrap and therefore may increase revenues for fabricators and recyclers.
Research and Development
Congress might consider the extent of support for R&D funding to commercialize technologies that could improve the productivity of the domestic aluminum industry or lower demand for aluminum from certain sectors. Examples may include technologies that allow facilities to produce HPA using scrap. Such breakthroughs could enable the U.S. aluminum sector to utilize abundant domestic scrap and more competitively produce higher-value aluminum products. Alternatively, research into new materials that could substitute aluminum in industrial or military applications may also reduce the national security and economic risks posed by disruptions in domestic supply.
Congress may assess current levels of funding for agencies and public-private partnerships that advance R&D relating to the aluminum industry. For example, the U.S. Department of Energy’s Advanced Research Projects Agency-Energy (ARPA-E) is authorized to “to enhance the economic and energy security of the United States through the development of energy technologies that … improve the energy efficiency of all economic sectors.”98 Past ARPA-E projects have focused on aluminum production.99 An example of a public-private partnership is the Manufacturing USA program, which is authorized to “facilitate the transition of innovative technologies into scalable, cost-effective, and high-performing manufacturing capabilities.”100 There might be additional programs, or programs that Congress might consider creating, that could advance aluminum manufacturing, identify alternative materials to substitute aluminum, or innovate in other ways.
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