Tariffs on aluminium - Delay for Canada
A positive step that needs to become a full exemption for Canada
Montreal, March 8, 2018 – Pursuant to the section 232 report on the impacts of aluminum imports on the U.S. national security, President Trump announced his final decision to impose a 10% duty on all aluminium imports, with a period of grace for Canada to negotiate an exemption.
“This is a positive step from the American administration and recognises Canada’s strategic role in the North American supply base. The goal remains to get a full exemption and we shall employ ourselves over the next weeks, together with our Canadian and Quebec governments and our U.S. allies, to find a pathway towards a full and permanent exemption,” said Jean Simard, President and CEO of the Aluminium Association of Canada (AAC).
Canada is a NATO partner, a close ally of the United States and an important part of its national security. The 232 report offered the President more narrowly focused options targeted on the real cause of aluminium market imbalance.
“A 10% tariff would impact all producing countries to a much greater extent than China, including free and fair trading regions such as Canada and Europe, while it should be the other way around”, added Jean Simard.
A 10% tariff on Canadian aluminium would increase the costs of the American downstream industry by approximately 700 million $USD. According to HARBOR Aluminum, while a tariff may create 1,900 jobs in the American primary industry, it could destroy between 45,000 and 90,000 direct jobs in the manufacturing sector. It is estimated that every new job created would cost 12.5 million dollars to the U.S. economy.
Moreover, an undifferentiated tariff does not address the core issue of the global aluminium market, which is China’s overcapacity. “Canada has stood alongside the U.S. and Europe over the past years to address the Chinese overcapacity problem with the creation of a Global forum on aluminium overcapacity. China is not the lead exporter of primary, bars, rods, profiles and wire aluminium to the United States, Canada is. “And so we would be the most impacted by a tariff, even though we have always followed international trade rules and have been a vital partner for the United States in times of war and peace”, said Jean Simard.
The Aluminium Association of Canada, with its long-standing partners The Aluminum Association and European Aluminium, as well as with the governments of Quebec and Canada, will continue to work towards a solution to global overcapacity which is respectful of international trade.
About the Aluminium Association of Canada (www.aluminium.ca/en)
The Aluminium Association of Canada (AAC) is a non-profit organization representing three Canadian world-class aluminium producers: Alcoa, Alouette, and Rio Tinto operating ten smelters in Canada, nine of which are in Quebec, and employing over 8,000 workers.
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