The Aluminum Association applauded the implementation of the U.S.-Mexico-Canada Agreement (USMCA), calling it an historic achievement for the North American aluminum industry. The agreement, ratified by all three countries, officially went into effect on July 1, 2020.
“We greatly appreciate the efforts of the U.S., Canadian, and Mexican governments in ensuring this trade agreement guarantees robust, fair, and rules-based trade of aluminum and aluminum products between the three countries. Furthermore, the new Rules of Origin that incentivize regional sourcing of aluminum for auto parts and vehicles will drive demand for U.S. aluminum manufacturers in the years to come,” said Tom Dobbins, president and CEO of the Aluminum Association.
Canada Trade Situation Still in Limbo
This announcement came after tension regarding possible reimplementation of the tariffs on imported aluminum from Canada over the last few weeks. Much to the chagrin of the Association and the Aluminum Extruders Council (AEC), in a letter dated May 26th 2020, the American Primary Aluminum Association (AAPA), which represents only two companies, called to repeal Canada’s exemption to the Section 232 tariffs. They claimed a “surge of Canadian metal” has caused price collapse, endangering the viability of the U.S. primary industry. In a letter to the U.S. Trade Ambassador, the Aluminum Association argued against these “false reports,” stating consistent import levels with those prior to the implementation of 232.
On June 25th, fifteen CEOs and other senior executives representing the entire aluminum industry value chain in the United States sent a letter to U.S. Trade Representative Robert Lighthizer, calling for continued quota-free Section 232 tariff exemptions for aluminum in North America.
The integrated North American aluminum supply chain has been essential for the U.S. aluminum industry’s ability to invest and grow over the past several decades. Fully 97% of U.S. aluminum industry jobs are in mid-and-downstream production and processing, and these jobs depend on a mix of domestic and imported primary aluminum to meet demand, including from countries like Canada.
As manufacturers transition to comply with USMCA, increased trade of aluminum within North America will benefit the U.S. aluminum industry. President Trump struck a good deal to exempt Canada from the Section 232 tariffs last year, and that deal is still working for the U.S. aluminum industry and the 690,000 American jobs it supports.
Today, July 7th 2020, the Washington Examiner ran an op-ed by Dobbins arguing against the reinstatement of Section 232 tariffs on North American aluminum, affirming that this would undermine the newly implemented USMCA.
“Inexplicably, the reinstated tariffs would target only Canada and only aluminum — not steel, not agriculture, and certainly not nonmarket economies. This demonstrates that this threat is really just the product of good lobbying by self-interested players, not good policy. Only two primary aluminum companies that don’t use any Canadian aluminum stand to benefit. The rest of the U.S. aluminum industry would suffer, and the rest of the economy would suffer with it,” said Dobbins.
As of today’s date, The Trump Administration has yet to provide an update on the reports from last week that it would consider reimposing the Section 232 aluminum tariffs on Canadian imports by July 1. For now, the North American aluminum industry will just have to wait with bated breath.
If you wish to write your member of Congress to support American aluminum jobs by keeping primary aluminum exempt from the 232 tariffs in North America, you can do so here.