Aluminum maker Alcoa (AA) has warned that President Trump’s plans to impose tariffs on imports of the metal could cost about 100,000 U.S. jobs.
Tariffs Bad for U.S Workers
Alcoa’s boss Bill Oplinger, according to a Reuters report, told the BMO Global Metals and Mining Conference in Florida that the tariffs could cost about 20,000 U.S. aluminum industry jobs and a further 80,000 jobs in sectors that support it. “This is bad for the aluminum industry in the U.S. It’s bad for American workers,” said Oplinger.
Shares in the group were down nearly 3% as it said that Trump’s threatened 25% tariffs move – partly to boost domestic production of the metal used to make cars, cans and other products – would not, in fact, lead it to increasing output in the U.S. The tariff will begin on March 4.
Alcoa, based in Pittsburgh, has slimmed down its U.S. production in recent years due to electricity costs. It also produces the metal in Canada, Iceland, Australia and other countries. However, despite Trump officials asking Alcoa to fire up its shuttered U.S. facilities, Oplinger said it was proving to be a difficult investment decision. This is probably because there is uncertainty over how long tariffs would last, or even begin, given Trump’s notorious fickleness.
Russia On the Horizon
Oplinger added that he believes that any end to the conflict between Ukraine and Russia would lead to more aluminum moving from the previous pariah state to the U.S. It was reported today that President Putin is also eager to develop closer working relationships with US aluminum companies including joint projects in Siberia.
Is AA a Good Stock to Buy Now?
On TipRanks, AA has a Moderate Buy consensus based on 5 Buy and 2 Hold ratings. Its highest price target is $58. AA stock’s consensus price target is $47.57 implying an 39.58% upside.
