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Possible reinstatement of aluminum tariffs on Canada would hurt US industry

Tuesday, Jun 30, 2020

   Canadian Prime Minister Justin Trudeau said June 29 US tariffs against imports of Canadian aluminum would ultimately hurt US manufacturers, citing recent reports that the Trump administration may reimpose the tariffs on Canada as early as July 1.

  "We have heard the musings and proposals from the United States that perhaps there needs to be more tariffs on aluminum," Trudeau said during a press conference with reporters. "What we simply highlight is the United States needs Canadian aluminum."
  Trudeau said the US does not produce enough primary aluminum to meet its domestic demand.
  "If they put tariffs on Canadian aluminum, they are simply increasing the costs of necessary inputs to their manufacturing base which will hurt the American economy," he said. "Again, we see that our economies are so interlinked that punitive actions by the United States administration end up hurting Americans the same way they end up hurting Canadians."
  Trudeau's comments regarding the US industry and Canadian aluminum echo similar statements from the US-based Aluminum Association.
  "Even at full capacity, US primary aluminum smelters can only meet about one-third of the demand for this vital material," the association said June 25 in a letter to US Trade Representative Robert Lighthizer. "The aluminum industry has no choice but to import a significant amount of primary aluminum to meet demand."
  The Trump administration placed 10% tariffs on primary aluminum imports, along with 25% tariffs on steel imports, in 2018. Canada and Mexico were granted exemptions from the tariffs in 2019.
  However, the American Primary Aluminum Association has called for the tariffs to again be placed on Canada.
  "Since the 10% tariff on Canadian aluminum imports was lifted, Canadian product has surged into the US causing the domestic price of aluminum to fall, capacity to stall and workers to be laid off," APAA CEO Mark Duffy recently told S&P Global Platts.
  Conversely, the Aluminum Association has argued that current aluminum import trends from Canada are consistent with pre-tariff levels.
  "While it is true that imports of Canadian metal have increased, import volumes today are similar to 2017, prior to the implementation of Section 232 tariffs and the year that most closely resembles current US production levels," the Aluminum Association said in a statement June 9.
  The Aluminum Association said the July 2019 restart of the Aluminerie de Becancour aluminum smelter in Quebec after the resolution of a labor dispute was responsible for any increase in imports, rather than the tariff exemption.

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