A consortium of North American aluminium trade associations are calling for exemptions for Canada and Mexico from the United States' 10% Section 232 tariff on aluminium imports.
“We are now asking that you work together expeditiously to resolve the national security concerns related to the Section 232 tariffs on aluminum products within North America, and to ensure the United States reinstates the exemptions from the aluminium tariffs for Canada and Mexico,” the letter stated. “The USMCA (United States-Mexico-Canada Agreement) cannot work for the aluminum industry or our many downstream customers without exempting Canada and Mexico from the 232 tariffs or quotas.”
The trade groups also called on the North American nations' leaders to work together to address aluminium production overcapacity in China.
The letter was addressed to US President Donald Trump, Canadian Prime Minister Justin Trudeau, Mexican President Enrique Peña Nieto and Mexican President-elect Andrés Manuel López Obrador and signed by Aluminum Association president and chief executive officer Heidi Brock, Aluminium Association of Canada president and CEO Jean Simard and IMEDAL president and CEO Fernando Garcia.
The failure of the current version of the USMCA to eliminate the tariffs and quotas on aluminium shipments to the US has sparked the ire of downstream aluminium companies, with Constellium CEO Jean-Marc Germain last month calling on trade regulators to exempt Canadian and Mexican imports as part of the agreement.
US regulators confirmed on October 1 that the USMCA would maintain the 10% tariff on aluminium imports from Canada and Mexico.
The Aluminum Association has been consistent in its advocacy that Chinese overcapacity is the largest issue facing the US industry, and believes it should be the primary objective of US tariffs.
“Our respective governments recognize the need to protect against transshipment and continue to take action, and we believe that continued cooperation on this front will address the national security concerns raised by the Section 232 on aluminum imports,” the aluminium groups said in the letter. “Tariffs and other trade measures to limit the trade of aluminum products within the region are no longer needed.”
The US Midwest aluminium premium has surged this year, factoring in the effects of both the Section 232 tariff and sanctions placed against Russian aluminium supplier UC Rusal Plc. The aluminium P1020 duty-paid premium was assessed by Fastmarkets AMM at 19.25-19.75 cents per lb on November 2, more than double the 9.4-9.5-cent-per-lb range recorded at the start of this year.