Debate Over Reinstatement Of Section 232 Tariffs On Canadian Aluminium Heats Up As Implementation Of USMCA Approaches

Debate Over Reinstatement Of Section 232 Tariffs On Canadian Aluminium Heats Up As Implementation Of USMCA Approaches

The debate raged last week among aluminium industry movers and shakers regarding the propriety of reinstating Section 232 tariffs on imported aluminium into the United States after the final implementation of the United States-Mexico-Canada Agreement at the beginning of next month.

In comments before a Senate hearing on Wednesday, the U.S. Trade Representative Robert Lighthizer indicated that the administration would likely reinstate the blanket tariffs if imports from Canada were higher than before.

“I would say there have been surges of steel and aluminum, substantially from Canada and some from Mexico, and it is something that we are looking at. The way the agreement worked is both countries agreed that they would maintain substantially the same trade as they have before, but we are seeing surges in some products.”

Later in the hearing, Pennsylvania junior United States Senator Pat Toomey (R) spoke against maintaining Section 232 aluminium tariffs, as the tariffs have worked a material harm against American manufacturing.

“In my state of Pennsylvania, we have fewer manufacturing jobs today than we had three years ago. Far more people are in the business of using steel and aluminum to produce things than the people who actually make steel and aluminum. So when tariffs raise the cost of the steel and aluminum, those are higher cost inputs for those manufacturers who are less able to compete with foreign companies that are not subject to those taxes.”

For its part, American aluminium trade group The Aluminum Association noted in comments the week prior that exemptions to the Section 232 tariffs have not fostered an appreciable rise in imported aluminium from the dominion to date.

“Everyone is entitled to their opinion on this issue, but facts are facts,” explained the Association’s CEO Tom Dobbins in a statement. “Imports of primary aluminum from Canada today are consistent with long-term trends long pre-dating the imposition of Section 232 tariffs.”

The Aluminum Association also commented upon the mixed messaging reimposing Section 232 tariffs on Canadian smelters would send after adopting the USMCA.

“We are genuinely perplexed by the efforts of one or two companies to move backward on maintaining the free flow of aluminum in North America, particularly on the cusp of implementing a historic trade agreement,” said Dobbins in a recent interview with S&P Platts. “The vast majority of US aluminum industry jobs rely on a mix of domestic and imported primary aluminum to meet demand. Our members, which represent the entire industry value chain, support a tariff-free aluminum trade within North America.”