Will US Aluminium Consumers Pay for 232 Tariffs - CRU
Metal News - Published on Thu, 22 Mar 2018
President Trump has imposed a 10% tariff on US aluminium imports. Alongside Mexico and Canada, Australia has now also been exempted. Along with domestic production restarts set for the coming year, can smelter restarts and higher imports from Canada and Australia balance the US market?
The US President issued an executive order following the Section 232 investigation, examining the threat of aluminium imports on national security. As a result, a wide ranging 10% tariff on aluminium imports will be implemented on 23 March. Exemptions were given to Canada and Mexico, contingent on "satisfactory outcomes in ongoing negotiations." Even with this exemption, over 35% of annual US primary aluminium consumption would need to be supplied from countries which are now subject to the duty.
On Twitter, President Trump has since announced that Australia will be exempted. In exempting Canada and Australia, the US has exempted the third and fifth largest producers of aluminium outside of China from its import tax. For now, Canada and Australia have no caps or quotas on shipments to the US, but these may come.
For the foreseeable future, the US will remain heavily dependent on imports. In 2017, the US primary aluminium import requirement stood at 4.7 million tonnes, and only 14% of demand was met by domestic smelters. US smelters are expected to almost double output from 2017 to 2019. The New Madrid smelter will restart 200,000tpy of capacity in 2018, while Century Aluminum plans to restart 150,000tpy of idle capacity at its Hawesville smelter.
Source : Strategic Research Institute