Alcoa reacts to tariffs on foreign aluminum

Thursday, Apr 12, 2018

  The new 10-percent tariff on foreign aluminum imports is intended to help the industry thrive at home, but Alcoa as an aluminum producer is expressing deep concerns over the tariffs.

  Alcoa operates the intalco Works plant at Cherry Point west of Ferndale.
  In early March, U.S. President Donald Trump announced that he and his administration would impose tariffs on steel and aluminum imports as the result of a determination made by the federal Department of Commerce stating that imports of these materials threaten national security.
  This stems from section 232 of the 1962 Trade Expansion Act, which deals with these kinds of national security threats.
  The 10-percent tariff on imported aluminum particularly affects the local aluminum smelter. Alcoa released a statement to the Ferndale Record last week regarding the effects of the tariffs on its business as a whole. The company’s statement refers to some of the countries that Trump ended up exempting from the tariff.
  “Alcoa welcomes the additional countries exempted from the Section 232 remedies, and we ask the administration to expedite negotiations to remove uncertainty and make those exemptions permanent. We also support adding other fair-trading partners to the list of excluded countries, and we encourage the administration to begin discussions as soon as possible to address the issue of unfairly subsidized Chinese overcapacity,” the Alcoa statement reads.
  The “unfairly subsidized Chinese overcapacity” pertains to aluminum produced out of China using artificially cheap loans and coal, electricity and raw materials, according to a Reuters report from early 2017.
  The exempted countries at this point are Argentina, Australia, Brazil, Canada, the European Union, Mexico and South Korea, which have been given temporary exemptions from Section 232 remedies until May 1. Alcoa operates foreign smelters abroad in Australia, Brazil, Canada, Iceland, Italy, Norway and Spain.
  Alcoa has joined up with 114 producers and other companies related to aluminum production, collectively known as the Aluminum Association, in expressing their concerns over the global tariffs and their effects on the aluminum industry around the world, specifically related to U.S. jobs, according to a CNBC report.
  The group has urged Trump to look at other ways to solve aluminum import problems, including Chinese aluminum overcapacity.
  In terms of specific effects on the local Intalco operation, Alcoa declined to comment.
  “Alcoa is not commenting on the impacts to individual smelters,” the statement reads. “We consistently evaluate our curtailed assets against a variety of factors, including energy costs, capital requirements and market conditions. No decisions have been announced regarding any of Alcoa’s idle capacity in Washington State.”
  Alcoa’s Wenatchee smelter currently sits idle, while any idling of the Ferndale Intalco smelter was averted in 2016 due to a negotiated deal for cheaper power prices.

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