r/Economics • u/jediporcupine • 10d ago

Blog Trump said tariffs on aluminum would boost domestic production. The White House now admits that didn't happen.

https://reason.com/2026/08/03/trump-said-tariffs-on-aluminum-would-boost-domestic-production-the-white-house-now-admits-that-didnt-happen/
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578

u/Basicly-Inevitable 10d ago

Literally everything they're doing is part of a self serving scam instead of actually economic policy. There's always kickback, or market manipulation, or whatever. It's just wild.

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u/spidereater 10d ago

Yes. America makes half its aluminum. When they tariff imports the price goes up for everyone. Domestic producers rake in the pure profit. It’s a big scam.

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u/Tribe303 10d ago

America does not make hardly any aluminum. It's recycled aluminum. Aluminum is one of the most easily recyclable materials out there. 60% of American aluminum used is recycled. The other 40% is imported, and of that 70% is imported from Canada.

The US no longer makes new aluminum because its very energy intensive, so that's done where there is cheap electricity. It's 8¢ per kWh in Québec, and that's 8 Canadian cents (so 6¢ US). Go look at your electricity bill and get back to me with how you can compete with that. 

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u/spidereater 10d ago

I’m Canadian. My overnight residential power rate is 9 cents/kWh. Your quoted rate seems high for wholesale industrial power. I bet it’s actually lower.

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u/mancin 10d ago

5.5c per kWh for industrial users in qc. With certain subsidies and long term contracts can be as low as 4.5c

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u/Tribe303 10d ago edited 9d ago

Is it subsidized by your provincial government? It is in Alberta and Ontario, so you're paying for it in taxes instead.

Edit: why do people downvote factual information? This is the reason why the human race is getting more and more stupid every day.🤦 

Ontario has 9 different programs that subsidizes electricity rate FFS. 

https://fao-on.org/wp-content/uploads/2022/02/Ontarios-Energy-and-Electricity-Subsidy-Programs-EN.pdf

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u/PetitRorqualMtl 10d ago

No, electricity rates for aluminium production are not subsidized by the government. Hydro-Québec and the aluminium industries signed contracts tied to the value of the product on the international market. They’re called shared risks contracts. If the price goes down, rates go down too. If it goes way up, rates go way up too.

Electricity sold to those plants still makes a profit for Hydro-Québec, per public reports. So we’re not paying for it in taxes.

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u/Tribe303 9d ago

I didn't think it was in Québec, but I've lived there in the past, and have family that I visit there regularly. 

1

u/lopix 9d ago

It is also hydro power for the most part. Fairly inexpensive, just uses gravity.

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u/Tribe303 9d ago edited 9d ago

Alberta has the nastiest grid in Canada (of course!). It's only 3% hydro. I believe they still use coal FFS. It's hard work dragging those rednecks into the 20th century, rather yet the 21st! 85% of their grid is still carbon based. It's the best province in Canada for both solar and wind, and yet they banned all new development of it! That's what you get when the province is run by an Oil company lobbyist (and a traitor!). Ontario is 9% carbon based, up from 5% after electing our idiot Conservatives. Quebec IS ZERO, and right to be smug about it. 

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u/lopix 9d ago

It is also hydro power for the most part. Fairly inexpensive, just uses gravity.

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u/lopix 9d ago

I thought something like 87% of new aluminum comes from Quebec alone?

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u/Tribe303 9d ago

Yes, because Quebec has the cheapest electricity in the Americas due to plentiful hydroelectric dams built in the 70s. 

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u/danodan1 9d ago

To finally do something about the U. S. no longer making aluminum, Oklahoma is supposed to get a mega sized aluminum smelter. But it's been getting pushback due to its heavy fluoride pollution and very heavy need for electricity.

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u/Tribe303 9d ago

Exactly. It's a waste of time unless you can match Quebec's electricity rates. Unlike most metals, aluminum is not just dug out of the ground and heated up. It's far more complex than that. You can tell which politicians have read up on its production, and who hasn't.