“Earlier today I signed a proclamation that defends American industry by reimposing aluminium tariffs on Canada,” Trump said on Thursday, speaking at the Whirlpool Corp factory in Clyde, Ohio. “US Trade Representative Robert Lighthizer has advised me that this step to reimpose tariffs is absolutely necessary to defend our aluminium industry.”
The renewed duties, which will apply to imports of non-alloyed unwrought aluminium articles from Canada, are set to take effect from August 16, according to the proclamation
With respect to other aluminium products, the US will monitor for import surges, “to ensure that exports of non-alloyed unwrought aluminium to the United States are not simply reoriented into increased exports of alloyed, further processed or wrought aluminium articles,” the proclamation noted.
For months, market participants had speculated about whether Trump might reinstate those duties.
Fastmarkets’ aluminium P1020A premium, ddp Midwest US has rebounded in recent weeks, supported by market expectations that the duties would be renewed. Fastmarkets most recently assessed the premium at 11-12 cents per lb on Tuesday August 4, up by 31.4% from a three-and-a-half-year low of 8-9.5 cents per lb, where the premium held from mid-May until mid-June.
Following the announcement, market participants predicted that the premium will jump by several cents, with estimates ranging from 14.5-18 cents per lb.
Sources also expect trade flows to shift immediately, with producers in Russia, India and elsewhere likely to start shipping more primary aluminium to the US market.
US aluminium companies - including Century Aluminum and Magnitude 7 - had called on the Trump administration to remove Canada’s exemption from the 232 duties, but other aluminium producers and trade associations warned that doing so would have a “financially disastrous” effect on American manufacturers.
After the Section 232 tariffs - 10% on aluminium imports - were applied to shipments from most countries in March 2018, Fastmarkets’ P1020 aluminium P1020A premium spiked, reaching 22-23 cents per lb on April 10, 2018, up from 9.4-9.5 cents per lb at the start of 2018.
The duties were applied to imports from Canada in June 2018, and were removed in May 2019.