The U.S. government is threatening to re-impose tariffs on aluminum imports from Canada.
If Canada refuses to impose export restrictions on aluminum, the U.S. will announce this Friday (June 26) the re-imposition of 10% tariffs on aluminum and implement the tariffs by July 1. The announcement would come just days before the new U.S.-Mexico-Canada trade deal enters into force at the start of July.
U.S. Trade Representative Robert Lighthizer has expressed concern about recent struggles by American aluminum producers, which have seen sales drop and all-in prices sink as demand evaporated amid the coronavirus pandemic.
Lighthizer told the Senate Finance Committee in a hearing last week that recent surges in metal imports from North American neighbors are "of genuine concern to us now," and that his office was looking at the issue.
A statement from Canadian Deputy Prime Minister Chrystia Freeland’s office said that Canadian exports don’t harm the U.S. market. Ironically, the three U.S. aluminum producers -- Alcoa Corp. (NYSE:AA), Century Aluminum Co.(NASDAQ:CENX) and Magnitude 7 Metals LLC -- disagree on whether tariffs should be re-imposed.
The American Primary Aluminum Association, which represents Century Aluminum and Magnitude 7 Metals, has asked Lighthizer to reimpose a 10% tariff on imports of Canadian aluminum, saying a rise in metal coming from the country has caused the price to collapse.
However, the Aluminum Association of the U.S., which represents Alcoa Corp., Rio Tinto Group and dozens of other aluminum-parts makers, argues instead that imports are virtually unchanged since 2017.
The benchmark price of aluminum traded in London, England is down 12% this year, and the price paid to ship metal to the U.S. Midwest -- a critical part of the all-in price for domestic producers -- is down more than 40%.
