‘The way capitalism operates': Tariffs cause domestic aluminum prices to rise

Aluminum  |  2026-08-20 23:41:53   |   By

Congressman Scott Fitzgerald, R-Juneau, took the lead in organizing the letter. He said the price of domestic aluminum simply should reflect the cost of manufacturing and distribution in the U.S.

SEATTLE (Scrap Monster): When President Donald Trump raised tariffs on aluminum imports last year, he said the increase would protect U.S. industries and national security.

Something else also happened: Aluminum prices increased. 

“People who sell it charge more because they can, and that's what happens when we put tariffs on goods,” said Tucker Balch, a finance professor at Emory University’s Goizueta Business School. 

By making foreign-produced aluminum more expensive with the addition of tariffs, the President hoped to improve the fortunes of domestic aluminum producers, including recyclers. 

But Balch said increasing the price of foreign aluminum created an incentive for domestic producers to raise their prices, too.

He explained that if they didn’t match the price of imported aluminum, they’d be leaving money on the table.

“Someone selling recycled aluminum can get that price, or close to it, and so that's what they're going to do. That's the way capitalism operates,” Balch said. 

Lawmakers on Capitol Hill aren’t happy about this.

In a letter to Commerce Secretary Howard Lutnick, a bipartisan group of lawmakers complained that domestic prices should not have increased to record highs. Balch disagrees.

“The point the lawmakers are making doesn't make sense because it's just a consequence of the markets,” Balch said. 

Congressman Scott Fitzgerald, R-Juneau, took the lead in organizing the letter. He said the price of domestic aluminum simply should reflect the cost of manufacturing and distribution in the U.S.

“We're getting crushed right now because we're paying this extra amount that, quite honestly, is just on top of what the regular market bears here in the states,” Fitzgerald said. 

Experts say it’s not so simple.

“I take the administration at their word when they say that the point of tariffs is to bring costs down and to grow domestic supply,” said Thomas Kemp, the chair of UW-Eau Claire’s economics department. “That can be a lot more complicated than one might think.” 

The Commerce Department did not respond to a request for comment. Fitzgerald said Lutnick is aware of the issue and is working on it.

Courtesy: www.spectrumnews1.com