(Bloomberg) -- Alcoa Corp., the largest US aluminum producer, warned that a threatened 25% tariff on imports of the metal from Canada would have a “quieting effect” on American consumption, despite otherwise strong demand expected in everything from packaging to electrical needs.

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The Pittsburgh-based producer said it expects 2025 to have the highest aluminum demand in history, with global consumption to be up by about 2%. But that view, Chief Executive Officer William Oplinger said in an interview, does not include the potential implementation of trade barriers by the US. 

The comment came amid the company’s fourth-quarter earnings during which it said it expects shipments to be 2.6 million tons to 2.8 million tons this year, outpacing the 2.59 million tons shipped in 2024.

Aluminum markets face potential disruptions to global trade and supply, with the European Union considering import restrictions from Russia and President Donald Trump threatening wide-ranging tariffs on foreign goods. Alcoa has plants in the US and Canada, as well as operations in Australia, Brazil and throughout Europe.

“A 25% tariff on aluminum products coming in from Canada has a $1.5 billion to $2 billion negative impact on consumers,” Oplinger said. “That will have a quieting effect on demand we believe in the US.”

The company, which produces a large amount of the metal in Canadian mills, vocally opposed US tariffs in 2018 when the first Trump administration imposed duties. Canada has been exempt from US aluminum tariffs for years and a revival of restrictions is expected to make the metal more costly for American buyers. The US imported 2.8 million tons from Canada in 2023, making it by far the largest foreign supplier, Alcoa said in its presentation to analysts.

The implementation of the tariff is no sure thing. Oplinger’s comments were in reference to Trump’s off-the-cuff remarks earlier this week that he planned to impose previously threatened tariffs of as much as 25% on Mexico and Canada. Trump’s 2018 aluminum duty was a much lower 10% on all countries, and eventually exempted Canada completely. 

“At this point I just hate to speculate,” Oplinger said when asked about the impact of a lower tariff. “We’re weeks away from having clarity around tariffs.”

Shares of Alcoa were little changed after the close of regular trading in New York.

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