Aluminum Producers Praise Trade Protections but Not Against Canada
The Aluminum Association is pleased by the hike in Section 301 tariffs on aluminum products -- even though it applies to more products than it wishes were covered -- and says Mexico's reporting is helping with trade remedies covering Chinese, Russian and Belarussian steel.
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In July, the White House said Mexico's exemption from the Section 232 tariffs would be curtailed, so that aluminum smelted or cast in China, Russia or Belarus but worked again in Mexico will be taxed at 200% (see 2407100005).
Mexico has improved its tracking of the last country of smelt and cast for its aluminum, Aluminum Association CEO Chuck Johnson said during a news conference at the group's annual meeting.
He said there had been a cessation of trade data in the sector, and while Mexico has resumed reporting, the "rigor of the program and the timeliness of the program" could be better.
Republican presidential nominee Donald Trump has threatened to impose a 10% or 20% tariff on imports from all countries other than China, and hasn't said anything about exempting free trade partners like Mexico and Canada.
Aluminium Association of Canada CEO Jean Simard said Canada will address changes if the tariffs come. "When you decide to play with tariffs, it's like playing with fire when you don't have water to put it out," he said. "Canada's been doing its homework across those years" since trade disruptions when Trump was in office, he added.
The Aluminum Association, given its integration with Canadian metal producers, never asked for Section 232 tariffs on aluminum, and Johnson emphasized that the two countries' aluminum supply chains are inseparable. "For decades, the U.S. aluminum industry, we have treated the U.S.-Canadian border as immaterial," he said.
Aluminum industry executives also were asked whether the Canadian aluminum industry could coordinate with U.S. officials on a carbon border tax, and how aluminum exports might be affected by Europe's Carbon Border Adjustment Mechanism, or CBAM, which is slated to require payments in 2026.
The EU imported almost $285 million worth of Canadian aluminum in 2022, or about 4% of the bloc's imports, as well as $871 million worth of U.S. aluminum that year. Russia, Mozambique and Iceland were its biggest suppliers.
Simard said that 90% of Canadian aluminum is produced in Quebec, which has a provincial cap and trade program, but the EU plans to use the national backstop carbon price from Canada, and the industry has questions about how that will affect its exports.
On establishing a global arrangement on steel and aluminum that Canada could be a part of, Simard said, "We are certainly highly interested in being part of this [discussion] as early as possible."
Simard noted that Canada produces 80% of the primary aluminum made in North America, and it has the lowest carbon footprint for any metal producer anywhere. Quebecois aluminum is smelted with hydropower.
Johnson said the Aluminum Association supports including a carbon club concept in the 2026 revision of USMCA, though it would need to see details before a full endorsement.
He acknowledged that primary smelting in the U.S. is dirtier than Canadian aluminum, but he said aluminum production through remelting scrap is higher in the U.S. than anywhere except Europe. About 80% of aluminum produced in the U.S. is from recycled feedstock; of the portion made from primary aluminum, 45% of that virgin aluminum is imported from Canada.