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Democratic victories in the November 3 US midterm elections have raised market expectations for a US-Canada trade agreement that could ease tariffs on Canadian aluminum. Democrats secured control of both the House and Senate, potentially increasing pressure on President Donald Trump to resume negotiations.

The US Midwest aluminum premium rose by 406% from early 2025 to a record US$1.19/lb in late May before easing to US$1.12/lb on November 4. Tariffs remained the main driver, compounded by supply risks associated with the war. Any relief would depend on presidential action concerning the 50% tariff imposed under Section 232 of the Trade Expansion Act of 1962. 

Market participants expect any agreement-driven decline in the Midwest premium to unfold gradually over weeks or months, with tariffs on other origins, shifting trade flows and tight global supply continuing to support prices. 

Industry estimates cited in the report indicate that imports meet more than 80% of US primary aluminum consumption. Canada’s share of US imports has fallen to around 62%, compared with 74% during 2020-2024, as Canadian smelters redirect shipments to Europe. 

Dealers remain cautious about replenishing inventories, while consumers continue buying as needed to limit exposure to high-priced metal before year-end. Uncertainty over the timing, scope, and durability of any tariff relief is likely to constrain purchasing activity.