Trump Aluminium Tariffs Will Only Penalize Consumers: Novelis CEO
08 March 2018 by Staff
America’s biggest buyer of aluminium joined the growing throng of voices in the aluminium community who have called into question the wisdom of U.S. President Donald Trump’s planned 10-percent bump in imports of the metal.
Steve Fisher, CEO of Atlanta’s rolled and recycled aluminium leader Novelis Inc. told Financial Times earlier this week that a blanket tariff on all aluminium fails to address the root of the problem facing America’s aluminium sector, namely that of significant overcapacity in the People’s Republic of China.
“At the end of the day what we’re doing is increasing the cost to end market consumers and customers. We’re not really getting at the core issue.”
Fisher went on to say that cooperating with China’s trading partners, though probably time consuming, is the better way to address the challenges presented by the Middle Kingdom.
“It’s not easy but it’s got to be done by allies and trading partners,” he opined.
Though China smelts around half of the world’s yearly output of aluminium, it sends no primary aluminium to the United States. All in, China ships a mere 10 percent of its total aluminium production to the U.S. (in the form of extrusions and other downstream products), which is less than 1 percent of the country’s total primary production of aluminium.
Fisher continued by saying that Trump’s tariffs could end up adding up to US$1 billion per year to the cost of aluminium beverage cans and US$3 billion to the cost of producing automobiles every year.
“The majority of this will be passed on to the end consumer, that’s where ultimately people will suffer,” concluded Fisher. “It’s a significant cost inflation borne by the US consumer.”
Novelis is a subsidiary of Mumbai’s Hindalco Industries Ltd. Based in Atlanta, the firm accounts for almost half of Hindalco’s consolidated revenue. The world’s largest recycler of aluminium, Novelis conducts operations in ten different countries, employs around eleven thousand people, and reported US$10 billion in revenue for the most recent fiscal year.