The US is preparing to impose a 200% tariff on Russian-made aluminum as soon as this week to keep pressure on Moscow as the one-year anniversary of the invasion of Ukraine nears, according to people familiar with the situation.
The move has been contemplated for months, said the people, who asked not to be identified discussing internal deliberations. The people added that the US is also targeting the Russian metal because Moscow has been dumping aluminum on the US market and harming American companies.
President Joe Biden has yet to give the official go-ahead for the action, and there have been concerns in the administration about collateral damage on US industries, including aerospace and autos.
Such steep tariffs would effectively end US imports of the metal from Russia. Russia is the world’s second-largest producer of the metal and Russian-supplied aluminum traditionally accounts for about 10% of total US imports.
The latest escalation of pressure on Moscow comes after Washington has unleashed unprecedented levels of sanctions to punish and isolate President Vladimir Putin’s government.
Aluminum imports from the nation dropped near zero in October after Bloomberg News reported the White House was weighing a retaliatory ban on the Russian metal. The potential for punitive tariffs, an outright ban or sanctioning of the company that produces the nation’s metal worried domestic buyers who didn’t want to be stuck with the material. But imports rose to 11,600 tons in November and nearly 11,000 tons in December.
January saw imports of 9,700 tons of aluminum from Russia.
Rusal shares in Moscow declined 1%. Aluminum futures traded on the London Metal Exchange pared an early 2.2% loss after the news, trading 1.1% lower as of 9:42 a.m. New York time. Russia is one of the top producers of the metal, and tariffs on its supply will likely tighten the global market and help boost prices.
Rusal, the only Russian aluminum producer, declined to comment immediately.
The White House National Security Council didn’t immediately respond to requests for comment.
Russia, the world’s largest producer outside of China, is a significant source of material for the US market. While most of it is value-added products, buyers across the US from building and construction to automotive.
Aluminum dropped about 15% last year amid worries of a slowing in global growth and the on-going pandemic lockdowns in China, the world’s largest consumer. Buyers in the US market since October had been discussing the potential of alternate supply in the event that Russian metal would receive a ban, tariff or sanction.
Discussions in recent months by industry participants have centered around where Russian metal would go if it suddenly was blocked out of the US market as well as Europe. One such destination could be China, with worries that the Russian metal could be transshipped through that country and other countries and land on domestic shores.