Canadian Aluminium Stakeholders Spar With U.S. Smelter Representative Over Trump Administration’s Ten-Percent Aluminium Tariff

Canadian Aluminium Stakeholders Spar With U.S. Smelter Representative Over Trump Administration’s Ten-Percent Aluminium Tariff

Aluminium industry representatives clashed late last week in an online forum with spokespeople from the two United States aluminium firms who led the charge to instate a 10-percent tariff on Canadian imports.

In an online event hosted by Washington International Trade Association, the two sides traded blows on the issue, with trade lawyer and lobbyist Robert DeFrancesco representing the United States’ only two aluminium smelters Century Aluminum and Magnitude 7 Metals.

DeFrancesco began by insisting that a “surge” in Canadian metal imports has happened this year, doubling totals from a year ago and defying an agreement between Washington, D.C. and Ottawa to limit such transactions.

“The period of June 2019 to July 2020 saw an average monthly Canadian import volume of unalloyed primary (aluminum) … at substantially higher levels than the average monthly import volume over any other period before the tariffs were imposed.”

He continued by positing that, had nothing been done, aluminium prices would have fallen even further, forcing more smelters into insolvency.

In contrast Jean Simard, president of the Aluminum Association of Canada, insisted to the contrary.

“Our metal has never been, is not, and never will be a threat to U.S. national security. As to the question of surge, there hasn’t been any, there is not and there won’t be — our industry is simply responding to market changes without increasing its capacity.”

He went on to note the cooperation the two countries’ economies had in responding to COVID-19 and the economic changes it wrought. As demand moved from value-added to primary aluminium, Canadian firms reacted by closing some lines of production and starting others.

President of the U.S. Aluminum Association Tom Dobbins countered the claims of a surge, and said that limiting imports from the dominion left the secondary industry with several unsavory options.

“We’re going to have to import our primary aluminum from somewhere and the alternatives to Canada are Russia, the Middle East and China. I do not have to explain to this audience why, for geopolitical reasons, these are poor alternatives.”

DeFrancesco later told the symposium that allegations that Rusal was acting through Century’s part-owner Glencore to open the door for imports of Russian aluminium were false, countering by noting that Chinalco was a minority owner of Anglo-Australian metals giant Rio Tinto.

“If we’re going to start looking at ownership structures, the largest producer in Canada, its largest shareholder is the largest Chinese state-owned aluminum producer. So how is that not relevant if the ownership structures of everyone else is somehow relevant?”

President of the Canadian Steel Producers Association Catherine Cobden commented later in the call to challenge the notion of an imports surge by presenting evidence of a nearly 40-percent drop since March. However, she said that she expected that this evidence wouldn’t much matter to the situation.

“The Canadian government correctly is concerned that it’s never entirely clear that they’re dealing with a trade partner that feels particularly constricted by the evidence or facts,” she opined.