Tariffs Eat Away at Profits for Alcoa, America's Largest Aluminum Maker

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http://fortune.com/2018/07/18/aluminum-tariffs-alcoa/

U.S. aluminum tariffs that were meant to protect the industry from foreign competitors are instead taking a bite out of the earnings of the nation’s largest producer.

Alcoa Corp. lowered its 2018 profit projection as tariffs on imported aluminum present what Chief Executive Officer Roy Harvey is calling a “significant” headwind. The manufacturer has been hit with $15 million so far on material it produced mostly in Canada and shipped to the U.S. The company also cited higher energy costs and lower aluminum prices for the cut.

The forecast adds to concerns for commodity investors over the potential impact of the tariffs, with metal prices and producer shares languishing amid growing concern that a trade war could hamper economic growth. Harvey zeroed in on the levies slapped on shipments from Canada, where Alcoa was expected to make 28 percent of its primary aluminum this year, according to Bloomberg Intelligence.

“Everyone assumed as did we that there would be an exception in place for Canadian production, so that has turned out not to be the case and that is a pretty significant impact for us,” Harvey said in a phone interview.

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