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US aluminum industry leaders oppose tariff on imports from Canada

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US aluminum industry leaders oppose tariff on imports from Canada

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Letter opposing tariffs signed by 16 US aluminum industry executives

Aluminum Association says industry relies on imports to meet demand

Trump administration considers placing tariffs on Canadian aluminum in July

Pittsburgh — The Aluminum Association, along with 16 senior executives representing aluminum companies with operations in the US, sent a letter to US Trade Representative Robert Lighthizer opposing the potential reinstatement of Section 232 tariffs on imports of the metal Canada, according to a statement from the trade group.

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"Today's letter shows an industry united in support of the continued free flow of metal within North America," Aluminum Association CEO Tom Dobbins said. "After all of the hard work that has gone into making the USMCA a reality, it would be a shame to move backward by reapplying tariffs or quotas on aluminum."

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.

The letter to Lighthizer said the United States-Mexico-Canada Agreement (USMCA), the updated North American trade pact scheduled to take effect July 1, will incentivize reliable aluminum trade flows between the US and Canada.

"We were therefore troubled by your testimony last week before both the House [of Representatives] and Senate committees that you are concerned by a 'surge' of primary aluminum imports from Canada and appear to be considering removing or otherwise modifying this needed exemption," the letter said, adding that US primary aluminum imports from Canada since the tariff exemption are consistent with levels prior to 2018.

The letter said US aluminum plants, especially those involved in downstream production, rely on the full integrated North American supply chain.

"Even at full capacity, US primary aluminum smelters can only meet about one-third of the demand for this vital material," the letter says. "The aluminum industry has no choice but to import a significant amount of primary aluminum to meet demand – the only question is from where?"

The letter said the US must promote trade with allies and instead focus on policies to target unfair subsidies in designated non-market economies that have promoted aluminum industry overcapacity and have threatened the US industry.

Backlash over tariff consideration

Several government officials and associations this week responded critically to reports the Trump administration was mulling the prospect of reimposing the aluminum tariffs on Canada as early as July 1.

Neil Herrington, the US Chamber of Commerce senior vice president for the Americas, said the idea of reinstating the tariffs "would be like a bad horror movie."

"Most of the US aluminum sector opposes them, and they'll hurt American manufacturers who use aluminum as an input," he said in a June 23 statement. "Canada will surely retaliate against US exports."

Canada's President of the Treasury Board Jean-Yves Duclos commented on the importance of free trade flows between the US and Canada.

"The use and the production of aluminum in Canada is no harm and no threat to our American friends and neighbors," Duclos said during a press conference June 23. "The free flow of aluminum across our border is a mutual benefit to both countries and workers in both countries."

Similarly, Canadian general trade union Unifor sent a letter to Prime Minister Justin Trudeau outlining its opposition to the tariffs on Canada.

"I urge you, Prime Minister, to reject any concessionary demands the US requests of Canada on this matter," Unifor National President Jerry Dias said in the letter. "We must not allow these bullying tactics to succeed. I urge you to stand strong in the face of this misinformation campaign and reject any quotas that would disrupt the Canadian aluminum industry once again and lead to unnecessary layoffs."

Conversely, the American Primary Aluminum Association has repeatedly called for the tariffs to again be placed on Canada, adding that the broader Section 232 tariffs have been essential for sustaining new primary aluminum smelting capacity in the US

"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. "It is no coincidence that US smelters were viable when the Canadian tariffs were in place, and now that the tariffs are no longer in place, the smelters are under threat."

Duffy said the reimposition of tariffs on Canada was the only solution to protect the US primary aluminum industry.