September 20, 2020

Trump Reinstates Tariff on Canadian Aluminum

For months, American and Canadian officials have debated whether Canada’s rising imports violate that agreement or constitute a surge. Imports of Canadian aluminum have risen since the tariffs were lifted last year, but they remain below levels seen within the last few years.

The American aluminum industry has struggled to compete in recent years with producers in countries like China, Russia, Iceland, the United Arab Emirates and Canada that offer generous state subsidies or benefit from cheap electricity. Today, only a handful of American aluminum smelters, which make raw aluminum out of bauxite, still operate.

Supporters of the tariffs say that they have helped to revive American production, but that imports from Canada and the economic slump that accompanied the pandemic had once again thrown the industry into disarray. In April, the aluminum giant Alcoa idled a smelter in Ferndale, Wash., saying that production there was “uncompetitive.”

Two American companies with domestic aluminum capacity, Century Aluminum and Magnitude 7 Metals, have lobbied intensely for the tariffs to be reimposed. In a statement Thursday, Michael Bless, the chief executive of Century Aluminum, said the move “demonstrates this administration’s continued dedication to restoring the U.S. aluminum industry” and “helps to secure continued domestic production of this vital strategic material.”

But the rest of the aluminum industry, which has operations spread around the globe, including in Canada, has fought against the measure. The multitude of industries that use aluminum to make products including cars, beer cans and washing machines, have also argued against the levies, saying they increase their costs and make their products less competitive globally. Even Whirlpool, the appliance maker where Mr. Trump made his announcement on Thursday, has seen its costs for raw materials rise as a result of the metal levies.

In June, executives from more than 15 of the world’s largest aluminum companies, including Alcoa, Constellium and Novelis, sent a letter to the Trump administration arguing against the tariffs.

“Fully 97 percent of U.S. aluminum industry jobs are in mid-and-downstream production and processing,” the letter read. “These jobs depend on a mix of domestic and imported primary aluminum, including from countries like Canada.”

Article source: https://www.nytimes.com/2020/08/06/business/economy/trump-canadian-aluminum-tariffs.html

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