New U.S. metal tariffs would be ‘dumb,’ Canadian supply group says

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He then issued a statement to Automotive News Canada, saying:

“The administration has always had a distorted sense of the national interest because they confuse it with the re-election of a president who would sell it to pay personal debts. A foreign policy bent that punishes trading partners, goes easy on dictatorships and costs Americans more per capita is a trifecta that smart people should actually be embarrassed about.”

Volpe said any new tariffs would “reconfigure  sourcing dynamics” for his members that supply the North American auto industry with parts.

“Canadian based suppliers of aluminum parts can buy in-country without penalty. However, what we saw in the last metals tariff fight is that American aluminum suppliers arbitrarily raise their prices to sit somewhere just under the new tariff-adjusted rate,” he said in his statement. “That means everyone in both countries pays 9 percent more on aluminum if the tariff is 10 percent. Dumb.”

The tariffs would come just days before the new U.S.-Mexico-Canada trade deal enters into force on July 1. U.S. Trade Representative Robert Lighthizer has expressed concern about recent struggles by American aluminum producers, which have seen sales drop and all-in prices sink as demand evaporated amid the global pandemic.

Lighthizer told the Senate Finance Committee in a hearing last week that recent surges in metal imports from North American neighbors are “of genuine concern to us now,” and that his office was looking at the issue.

“I would say there have been surges on steel and aluminum, substantially from Canada, some from Mexico, and it is something that we’re looking at and talking to both Mexico and Canada about,” he told the panel’s top Republican, Sen. Chuck Grassley from Iowa.

A spokesman for the USTR didn’t immediately respond to an emailed request for comment outside office hours.

Under the May 2019 agreement, which resulted in initial tariffs being lifted, Canada has to limit its retaliation to the U.S. metals sector and cannot hit American agriculture, Lighthizer told Grassley.

Ironically, the only three U.S. aluminum producers — Alcoa Corp., Century Aluminum Co. and Magnitude 7 Metals LLC — disagree whether tariffs should be reimposed.

The American Primary Aluminum Association, which represents Century Aluminum Co.  and Magnitude 7 Metals LLC., has asked Lighthizer to reimpose a 10 percent tariff on imports of Canadian aluminum, saying a rise in metal coming from the country has caused the price to collapse.

The Aluminum Association of the U.S., which represents Alcoa, Rio Tinto Group and dozens of other aluminum parts makers, argues that imports are virtually unchanged since 2017.

Alcoa CFO William Oplinger said at a virtual bank conference in June that China’s overcapacity subsidized by the government is the real problem, and that he supports free trade with “those who trade freely, especially the Canadians.”

Greg Layson of Automotive News Canada contributed to this report.

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Saurabh Shukla

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