Canada could supply nearly all of the United States’ aluminum needs only if every tonne of domestic production were diverted south of the border, according to an analysis by Morgan Stanley. The U.S. currently imports about 80% of its aluminum consumption, with Canada historically serving as its largest foreign supplier.
In the first half of 2026, the U.S. imported 1.68 million tonnes of aluminum, averaging roughly 280,000 tonnes per month. During the same period, Canada exported 1.16 million tonnes to the U.S., averaging about 192,000 tonnes monthly and covering approximately 68% of U.S. import requirements. Canada’s total production during that time reached nearly 1.6 million tonnes, equivalent to roughly 95% of American import demand. Even under this scenario, the U.S. would still require metal from other countries to meet total consumption.
Morgan Stanley assessed potential policy shifts in Washington that could reduce tariffs on certain Canadian aluminum from 50% to 25%. Such a reduction would encourage Canadian producers to prioritize the U.S. market over Europe, where shipments enter duty-free. However, the marginal tonne required by American buyers would still originate from a country subject to the 50% tariff, keeping the U.S. Midwest aluminum premium elevated.
The premium has traded about 30% above the implied tariff cost, partly due to competition with European buyers for Canadian metal. A tariff reduction could ease this competition, pushing the premium closer to fair value. Morgan Stanley estimated the premium could decline by roughly half its current excess over tariff-based levels, translating to a drop of about 10 to 12 cents per pound.
The analysis also noted plans by Emirates Global Aluminium and Century Aluminum to build a 750,000-tonne-per-year U.S. smelter. Such capacity could further support domestic supply under potential tariff discounts for companies expanding production within the U.S.
