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U.S. Government Imposes Aluminum Tariffs on the EU, Canada, and Mexico

The U.S. government will begin imposing 10% tariffs on the import of aluminum from the European Union (EU), Canada, and Mexico as part of Section 232. The temporary exceptions that had delayed the implementation of these tariffs expired on June 1st and were not renewed (read the full presidential proclamation). However, Argentina and Australia will remain exempt from the aluminum tariff measures.

The EU, Canada and Mexico stated that they would impose tariffs on a range of U.S. products in retaliation, and the EU and Mexico announced plans to start a dispute settlement process at the World Trade Organization over U.S. tariffs on steel and aluminum.

The Aluminum Association released a statement expressing its disappointment in the decision to expand the Section 232 aluminum tariffs to vital trading partner countries. “The association, which represents the majority of aluminum production and jobs in the United States, believes that no country that operates as a market economy should be subject to unnecessary and disruptive tariffs or quotas,” stated Heidi Brock, president and CEO of the Aluminum Association. “The administration’s trade remedies should specifically target structural aluminum overcapacity in China, which is caused by rampant, illegal government subsidies in that country. Tackling overcapacity is the best way for the aluminum industry to thrive in the U.S., addressing the national security concerns identified by the Commerce Department in its Section 232 investigation.”

Brock added, “Today’s action does little to address the China challenge while potentially alienating allies and disrupting supply chains that more than 97 percent of U.S. aluminum industry jobs rely upon. During a time of record demand for aluminum in the United States, it is critical that aluminum producers across the value chain have a steady and reliable source of supply. While this is an unfortunate outcome, the Aluminum Association will continue its dialogue with the administration on our shared goal of a healthy and sustainable U.S. aluminum industry.”

The Aluminium Association of Canada (AAC) issued a statement noting the negative impact of the tariffs on the entire North American aluminum value chain — explaining that a 10% tariff applied to the US$5.6 billion of primary aluminum exported into the U.S. would increase the costs of the U.S. downstream industry by more than US$500 million.  “The overall price of aluminum will increase, affecting small and medium size businesses both in Canada and the U.S.,” explained Jean Simard, president and CEO of the AAC. “The consumers and companies that supply these consumers will suffer when prices go up as a result of these tariffs, ultimately undermining the competitiveness of the entire North American aluminum industry.”

European Aluminium also issued a statement. “As we stressed in the last months, European aluminum exports to the U.S., given both their quantity and characteristics, do not pose any threat to U.S. national security and should have been permanently exempted from the tariffs. We are very concerned that these unjustified unilateral measures put at risk the many industrial clusters, innovation hubs, and transatlantic synergies we share with the U.S.,” said Gerd Götz, director general of European Aluminium. “Not only will the tariffs have unintended negative consequences for our integrated aluminum supply chains, but they also fail to address the cause of the distortions in the global aluminum market: the unsustainable increase of overcapacity in China in both the primary and semi-fabricated aluminum sectors.”

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