U.S. Set to Announce Aluminum Tariffs on Canada by End of Week
Bloomberg
Published Jun 23, 2020 10:52
Updated Jun 23, 2020 11:09
(Bloomberg) -- The Trump administration is considering re-imposing tariffs on aluminum imports from Canada and an announcement could come by the end of the week, according to people familiar with the matter.
If Canada refuses to impose export restrictions on aluminum, the U.S. will announce Friday the re-imposition of 10% tariffs on aluminum from the country and implement the tariffs by July 1, according to the people, who asked not to be identified because the information isn’t public.
That would be just days before the new U.S.-Mexico-Canada trade deal enters into force on July 1. U.S. Trade Representative Robert Lighthizer has expressed concern about recent struggles by American aluminum producers, which have seen sales drop and all-in prices sink as demand evaporated amid the global pandemic.
Lighthizer told the Senate Finance Committee in a hearing last week that recent surges in metal imports from North American neighbors are “of genuine concern to us now,” and that his office was looking at the issue.
“I would say there have been surges on steel and aluminum, substantially from Canada, some from Mexico, and it is something that we’re looking at and talking to both Mexico and Canada about,” he told the panel’s top Republican, Senator Chuck Grassley from Iowa.
A spokesman for the USTR didn’t immediately respond to an emailed request for comment outside office hours.
Under the May 2019 agreement, which resulted in initial tariffs being lifted, Canada has to limit its retaliation to the U.S. metals sector and cannot hit American agriculture, Lighthizer told Grassley.
Ironically, the only three U.S. aluminum producers -- Alcoa (NYSE:AA) Corp., Century Aluminum (NASDAQ:CENX) Co. and Magnitude 7 Metals LLC -- disagree whether tariffs should be reimposed.
The American Primary Aluminum Association, which represents Century Aluminum Co . and Magnitude 7 Metals LLC., has asked Lighthizer to reimpose a 10% tariff on imports of Canadian aluminum, saying a rise in metal coming from the country has caused the price to collapse.
The Aluminum Association of the U.S., which represents Alcoa Corp., Rio Tinto (NYSE:RIO) Group and dozens of other aluminum parts makers, argues that imports are virtually unchanged since 2017.
Alcoa CFO William Oplinger said at a virtual bank conference in June that China’s overcapacity subsidized by the government is the real problem, and that he supports free trade with “those who trade freely, especially the Canadians.”
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Written By: Bloomberg
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