In August, the US administration significantly expanded the scope of Section 232 sectoral tariffs. On August 15, it was revealed that the Department of Commerce would be including 407 new HTS codes in the list, a change which came into effect on August 18. The new tariffs apply to a wide range of finished goods, including both household items, such as electrical appliances, and industrial goods, such as railcars and wind turbine components. The list includes additional codes for aluminum containers and cans, and small packaging.
Moreover, for the new product groups, the tariffs apply only to the steel and aluminum content of these products. For the global market, this means increased pressure on manufacturers focused on the US market. Aluminium prices on the London Metal Exchange (LME) showed a downward trend in August compared to the previous month, with expectations of lower demand and a restructuring of supply chains.
At the same time, tariffs are increasing inflationary pressure in the US by rendering imported goods and components more expensive, affecting sectors from transport to construction. Although consumer price inflation has not yet fully reflected the introduction of tariffs, showing a 2.7% y-o-y increase in July, sources in the US market report that consumer purchasing power is weak, which is holding back inflation.
The situation in metals is seen by market players to be accelerating the transition to alternative packaging materials such as cardboard, glass, and plastic, although for many, the immediate focus is on a switch to recycled aluminum, which is not subject to tariffs. Boosting local production of secondary foil and cans could help reduce the cost of aluminum packaging products in the US. Indeed, market sources expect dynamic price growth in secondary aluminum, so it is more likely that prices for secondary aluminum packaging will grow, albeit at a slower rate than those for primary aluminum. For example, in July, the Producer Price Index for Secondary Aluminum rose 5.6% m-o-m, while primary aluminum in the US rose 10% m-o-m.
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Written by Artem Segen
