Pittsburgh — The Aluminum Association said Aug. 7 that it disagreed with the reinstatement of tariffs on Canadian aluminum imports into the US, arguing that the move would not support the US industry as intended.
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"The Aluminum Association is incredibly disappointed that the administration failed to listen to the vast majority of domestic aluminum companies and users by reinstating Section 232 tariffs on Canadian aluminum," the industry group said in a newsletter to members.
"This ill-advised action on a key trading partner undermines the deal's benefits at a time when US businesses and consumers can least afford it," the association added, in reference to the US-Mexico-Canada Agreement, or USMCA, and the recent economic turmoil caused by the coronavirus pandemic.
The Aluminum Association said it understood the Trump administration's desire to help the US aluminum industry but said the tariff action against Canada would only hurt domestic companies, adding that China's aluminum overcapacity represented the real threat to the market.
Furthermore, the association refuted recent claims that imports of primary aluminum from Canada have surged.
"Data released this week by the US Census Bureau showed that overall primary aluminum imports from the US to Canada declined about 2.6% from May to June and are below levels seen as recently as 2017," the organization said. "The few companies that stand to benefit from reinstated 232 tariffs on aluminum have cherry-picked government data and omitted important context to build their case, which unfortunately won the day."
The Aluminum Association's member companies represent over 70% of the aluminum and aluminum products shipped in North America, according to its website.
US imports of primary aluminum from Canada under HTS code 7601 totaled 224,199 mt in June, down from 230,248 mt in May. However, the June imports represented a 27% rise from 176,313 mt in June 2019.
The Aluminum Association of Canada, or AAC, said monthly US imports of primary P1020 aluminum from Canada have fallen since March as Canadian smelters switch production away from P1020 and toward value-added products to supply returning demand in the automotive industry.
"There is no surge for 2020 over 2019," AAC CEO Jean Simard said in a statement Aug. 6. "Monthly anomalies do not make for a yearly surge. They are simply results of changing market dynamics in crisis times."
Associations, producers oppose
The Aluminum Extruders Council, or AEC, which specifically represents the US aluminum extrusion industry, shared the Aluminum Association's concerns regarding the tariffs on Canadian aluminum.
"Once again the Trump Administration has missed the mark in protecting the US aluminum industry," AEC President Jeff Henderson said in a statement Aug. 7. "With the entire domestic aluminum industry demanding that China's unrelenting overproduction of aluminum products come to an end, the Administration fires its guns at Canada, one of our critical aluminum trading partners."
Henderson said the trade measure would likely increase US aluminum prices and make the domestic manufacturing sector less competitive globally.
Alcoa, a member of the Aluminum Association with primary aluminum smelting capacity in the US, said the implementation of tariffs on Canada would disrupt necessary supply chains for downstream producers and distort the domestic market.
"The United States and Canada should be working together with other fair-trading partners to address the unfair subsidies that have incentivized persistent overcapacity in China," Alcoa said.
Global metals and mining company Rio Tinto echoed Alcoa's comments on market distortion, saying the tariffs would increase US aluminum prices for consumers and threaten the security of aluminum supply chains in North America.
"We are working with our US customers to minimize any negative impacts to the integrated supply of aluminum in North America," Rio Tinto said.
Rio Tinto, a member of the Aluminum Association, operates several smelters in Canada.