Shipments of Chinese aluminium and steel into the United States will remain subject to import tariffs under Section 232 despite both countries agreeing to hold off on a trade war.
"As it relates to China, the steel and aluminium tariffs will remain enforced," US Treasury Secretary Steven Mnuchin said in a Senate appropriations committee hearing on Tuesday May 22. "Those were not part of our discussions.”
High level trade talks between the US and China last week resulted in a truce between the two countries, with Mnuchin saying both countries are "putting the trade war on hold" while they continue talks to reach wider agreement - including reducing the United States’ trade deficit with China.
The latest comment by Mnuchin clarified that imports of Chinese aluminium and steel into the US will still attract the 10% and 25% duties, respectively, that were implemented on March 23 following the conclusion of the Section 232 investigations.
But other proposals by both countries to levy import taxes on each other’s products are now on hold.
In early April, the US had proposed a 25% import tax on 1,300 Chinese products, which included unwrought aluminium and aluminium products, after its Section 301 investigations. China, in response, had said that it will impose a 25% import tax on $50 billion worth of US-origin products including soy beans, vehicles, chemicals and airplanes, although it did not say when the proposed tax would be implemented.
The US’ imposition of the 10% import tax on aluminium and aluminium products had led to concerns that Chinese aluminium product exports could flood the rest of the world, putting downward pressure on aluminium premiums.
Chinese aluminium product exports had risen since late last year amid an open export arbitrage, with China’s exports of unwrought aluminium and aluminium products surging by 149.1% year on year to 1.72 million tonnes in January-April.
Aluminium premiums in South Korea have come under pressure amid an increase in imports of Chinese aluminium products.
South Korea’s imports of Chinese aluminium plates, sheets and strips rose by 70% year on year to 92,124 tonnes in January-April, with imports in April rising to the year’s highest monthly total of 25,491 tonnes.
Metal Bulletin’s aluminium P1020 cif main Korean Ports premium fell to $110-125 per tonne on May 22, from $125-135 per tonne on May 15.