U.S. Reverses Course on Aluminum TariffsSeptember 17th, 2020 by Drew Vass
Just weeks after reinstating a 10% tariff on aluminum imported from Canada, the U.S. backed off of those measures Tuesday, declaring that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of the year. After citing a substantial increase in imports over the period from June 2019 through May 2020, the tariff took effect August 16. In a statement issued Tuesday, however, the Office of the U.S. Trade Representative (USTR) said average monthly imports are expected to decline 50% from the monthly average experienced earlier in the year. Shipments of non-alloyed, unwrought aluminum from Canada aren’t expected to exceed 83,000 tons per month for the remainder of 2020, USTR said. Based on those expectations, in a sharp reversal, the U.S. is now set to resume duty-free treatment retroactive to September 1, 2020, while reserving the right to reverse its decision. Tariffs could be reinstated should actual shipments exceeded 105% of the expected volume for any month over a four-month period ending in December.
“If shipments in any month exceed the expected volume, the United States expects that shipments in the next month will decline by a corresponding Amount,” USTR’s statement said.
In a statement released Wednesday, “WDMA is pleased that the Trump Administration listened to the concerns of manufacturers and rescinded the tariff on Canadian aluminum,” said Window and Door Manufacturers Association president and CEO Michael O’Brien. “It is imperative that the Administration continue to honor its 2019 trade agreement with Canada and reject any further tariffs on North American steel and aluminum.” Tariffs can create uncertainty in the market, while negatively impacting relationships with longstanding trade partners, O’Brien added.
The U.S. originally imposed a 10% tariff on Canadian aluminum in March 2018 as part of Proclamation 9704, using section 232 of the Trade Expansion Act of 1962. In May 2019, the U.S. government determined that aluminum imports from Canada would no longer threaten to impair national security and the tariff was removed with the stipulation that these imports would be monitored.
Commerce secretary Wilbur Ross said imports of non-alloyed unwrought aluminum from Canada accounted for 59% of total Canadian aluminum imports from June 2019 through May 2020. According to Commerce, Canada is the largest source of U.S. imports of non-alloyed unwrought aluminum, accounting for nearly two-thirds of total imports of these articles from all countries in 2019 and approximately 75% of total imports in the first five months of 2020.
“The surge in imports of these articles from Canada coincides with a decrease in imports of these articles from other countries and threatens to harm domestic aluminum production and capacity utilization,” an earlier proclamation said.
USTR officials said the U.S. will consult with the Canadian government at the end of the year to review the state of the aluminum trade and expected market conditions in 2021.