Aluminum Association, Aluminium Association of Canada and IMEDAL release joint letter urging for quota free tariff exemptions

The Aluminum Association released a joint letter with the Aluminium Association of Canada and IMEDAL urging for quota-free exemptions from the aluminium tariffs for Canada and Mexico before the implementation of United States-Mexico-Canada Agreement (USMCA). Addressed to the Presidents of the US, Canada and Mexico,  the associations urged the administration to resolve any national security concerns related to the Section 232 tariffs on aluminium products while exempting the two trade partners from tariffs.   

The associations believed that the new USMCA cannot function properly without full exemptions for Canada and Mexico. They emphasised that the association members have been benefitted by the fair and legal trades of aluminium and aluminium products within North America. The proposed quotas, according to the associations, will only restrict their supply chains by limiting access for North American aluminium producers to their suppliers and customers and subsidiaries, while removal of 232 tariffs will allow continued growth and investment in the aluminium industry.

A quota on aluminium imports in North America would make it difficult to ensure that downstream manufacturers have access to the aluminium inputs they need. During trading, metal traders would be competing with mid- and downstream producers who need value-added primary aluminium with specific characteristics. Quotas may lead to the stockpiling of the metal by companies as it could get stuck on one side of the border when the quota has been filled. Companies then have to use the capital to buy raw material in bulk, which could have been used for other purpose.

They urged the administration to focus on the real issue of illegally subsidized aluminium overcapacity from China. Tariffs and quotas, according to them will only harm the overall competitiveness of the region benefitting China. The associations applauded the USCMA for recognizing concerns about transshipment and the illegal evasion of duties and supporting anti-dumping/countervailing duty (AD/CVD) investigations.

They expressed their faith on the administration and urged for active monitoring and continued cooperation in order to limit entry of China’s unfairly subsidized aluminium into the region’s shared market and address the national security concerns raised by the Section 232 on aluminium imports.