On July 20, 2026, U.S. President Donald Trump issued a proclamation modifying the Section 232 aluminum tariff regime. The proclamation is intended to encourage new investment in U.S. primary aluminum production and creates an incentive program aimed at accelerating the construction, expansion, and refurbishment of U.S. primary aluminum smelters. Section 232 duties on primary aluminum products, currently 50%, will be halved for companies with approved plans.
Onshoring Plans
Minimum onshoring plan requirements include “a commitment, if the plan is approved, to build, refurbish, or expand a facility in the United States that will produce primary aluminum” and a commitment to begin construction by Jan. 20, 2029 (the end of Trump’s current term). The secretary of Commerce may establish additional requirements.
Plans will be subject to review and approval by the secretary of Commerce, who may consider “all relevant factors he deems appropriate,” including commercial feasibility and reasonableness of the project. Importantly, in reviewing onshoring plans, the proclamation directs the secretary to act in a manner consistent with the need to address the “national security threat” posed by foreign aluminum imports.
The application procedure will build upon the 2025 import adjustment offset program established for certain aluminum and steel automotive products from Canada and Mexico. The offset program offers a relatively streamlined electronic application process. Onshoring plans may follow a similar approach, though they may include more robust requirements and built-in foreign investment screening mechanisms.
Incentive Tied to Projected Output
Companies with an approved “onshoring plan” may annually import primary aluminum in an amount tied to the reasonably anticipated annual output of the U.S. production facility once the onshoring project is complete, at half the Section 232 rate of duty otherwise in effect. As of April 2, 2026, that rate of duty generally stands at 50% for primary aluminum products and 25% for derivative products. Tariff adjustments awarded for facility refurbishment will be limited to the value of the company’s investment.
Companies with approved plans — or their designated representatives — will be permitted to import the designated quantity of primary aluminum. The proclamation does not extend the tariff reduction to imports of derivative articles or other industrial equipment.
The proclamation does not explicitly exclude the possibility of the tariff incentive being shared among common parties under an approved investment plan. Whether the beneficiaries of the tariff relief (i.e., aluminum producers) will be able to share the tariff benefits with their customers — that is, transfer the 25% imported aluminum allotment to a customer — remains an open question. This leaves open the possibility that aluminum producers could partner with customers or other stakeholders on shared investment proposals that, if approved, would permit some sharing of the allotted tariff incentive.
Commerce will monitor compliance with approved onshoring plans and may suspend, revoke, or retroactively rescind tariff benefits if a participant fails to satisfy its commitments.
Foreign Investment in Onshoring Plans Not Foreclosed
The proclamation does not expressly limit who may submit an onshoring plan for approval. Because primary aluminum is considered essential to defense and is tied to U.S. national security policy, stakeholders should consider the possibility of U.S. foreign investment screening and potential mitigation measures when evaluating non-U.S. investment or partnership under the onshoring program.
According to the U.S. aluminum import monitor, most primary aluminum imports to the U.S. come from Canada and the United Arab Emirates. Foreign investment from these or other countries may become subject to review by the Committee on Foreign Investment in the United States (CFIUS). It remains to be seen how the administration will assess and evaluate foreign inbound investment in primary aluminum onshoring plans under the CFIUS review process. It is also unclear what level of mitigation of foreign ownership may be required as consistent with the CFIUS review regime — specifically for Canadian investors that do not meet the criteria for “excepted investor” status under CFIUS regulations.