Canada sets aluminium transshipment measures in deal to end Section 232 tariffs

The government of Canada has announced measures to prevent the transshipment of aluminium into the United States, building on commitments made when the US removed its Section 232 import tariffs in May.

As of September 1, aluminium products will form part of Canada’s Import Control List (ICL) under the Export & Import Permits Act.

As a result, importers from next month will be required to cite the appropriate General Import Permit number to import a range of aluminium products, and will be subject to reporting obligations to the Canada Border Services Agency (CBSA).

The CBSA and Global Affairs Canada will then verify the accuracy of the reports, with penalties applied for inaccurate or fraudulent filings.

In May, Canada and the US agreed on measures to prevent the transshipment of aluminium through Canada and to monitor the aluminium trade between the two countries.

The commitment came as the Section 232 tariffs on imports of aluminium and steel from both Canada and Mexico were removed, paving the way for the passage of the United States-Mexico-Canada agreement, designed to replace the North American Free Trade Agreement.

Canada supplies about 45% of US primary metal needs, with about 70% of the country’s aluminium production destined for its southern neighbor. Rio Tinto Aluminium is the largest producer of primary aluminium in North America, with about 75% its material supplying more than 35 US states.

“These additions to the ICL will allow the government to track and monitor imports of aluminium and help to ensure that Canada does not become an entry point for transshipment or circumvention of Canadian or US trade measures,” Jean Simard, chief executive officer of the Aluminium Association of Canada, said.

“Canada is the historic source of aluminium produced with clean renewable energy in North America,” he added. “The actions today support Canada’s competitiveness in the production of aluminium and aluminium products. With this system of import monitoring in place, Canada sends a strong signal that it will not tolerate trade manipulation or circumvention through its ports.”

Aluminium premiums rose to 22-23 cents per lb in April 2018 on the tariffs and sanctions against Russian producer UC Rusal, softening after the later removal of both restrictions.

Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US, at 17.50-18.00 cents per lb on August 23, unchanged for two weeks since falling to this range on August 6.
 

Andrea Hotter

ahotter@fastmarkets.com

Published

Andrea Hotter

August 23, 2019

19:25 GMT

New York