- Two fires at the Novelis aluminum rolling plant in Oswego, N.Y. — the largest domestic supplier of automotive aluminum sheet — took the facility offline at least until June, forcing automakers to source replacement metal from Novelis’s overseas plants in Europe and South Korea
- That imported aluminum is subject to Trump’s 50% tariff, a cost passed directly to Ford and other automakers; Ford has already absorbed a $2 billion hit and expects to spend $1 billion more on imported aluminum this year
- The Trump administration has rebuffed Ford’s requests for temporary tariff relief, pointing to existing concessions on auto parts tariffs and — in a notable characterization — a White House official said Ford hasn’t raised the issue “in a particularly pronounced way”
- The situation is set to worsen: a recent metals tariff overhaul means many finished aluminum and steel products will now face a 25% duty on the product’s full value, not just the metal content — likely increasing total tariff costs for most automakers
What Happened?
Two fires last fall at Novelis’s aluminum rolling facility in Oswego, N.Y. — the largest domestic supplier of aluminum sheet for the U.S. auto industry — knocked the plant offline at least until June. The Oswego plant supplies roughly a dozen automakers including Ford, GM, Stellantis, and foreign producers with U.S. facilities. To cover the lost production, Novelis has been importing rolled aluminum from its plants in Europe and South Korea, but that metal is subject to a 50% tariff under Trump’s trade policy — a cost passed straight through to automakers. Ford, which relied on the Oswego plant for the aluminum exterior panels of the F-150, the country’s best-selling vehicle, has asked the Trump administration for temporary tariff relief pending the plant’s restart. So far, the administration has refused.
Why It Matters?
The episode illustrates how tariffs designed to protect domestic industry can inflict collateral damage when domestic supply chains break down. The aluminum delivery premium — which bundles tariff costs into the price buyers pay regardless of origin — now stands at roughly $2,500 per metric ton, meaning Ford and its peers are paying the tariff even on domestically produced metal. Ford’s $3 billion total aluminum cost hit from the fires and tariffs is a direct drag on profitability at a company already navigating an expensive EV transition. The White House’s flat denial — and its characterization that Ford hasn’t lobbied “in a particularly pronounced way” — signals that the administration has little appetite for carve-outs, even for politically sensitive companies like Ford, which hosted Trump at a Detroit-area factory visit in January.
What’s Next?
The Novelis Oswego plant is expected to return to service by June, which would relieve some of the supply pressure. But the broader aluminum tariff picture is getting more complex: a recent metals tariff overhaul changed the structure so that many finished products containing aluminum face a 25% duty on the full product value rather than a 50% levy on just the metal component — a change analysts say will increase total tariff costs for many buyers. With the Novelis plant still offline, tariffs on auto parts at 25%, and no relief in sight, the cost headwinds facing U.S. automakers in the months ahead remain significant.
Source: The Wall Street Journal
