Japan's aluminium industry fears the impact of possible US import car tariffs

On Wednesday, July 25, the head of a Japan trade body said that the country’s aluminium industry seems to be more concerned over the possible US tariffs on automobiles and automobile parts than the duties on aluminium. That’s because Japanese firms are confident that the kind of high-end semi-finished aluminium products they export to the US are not easily replaceable by domestic products due to unavailability and therefore, the tariffs are less likely to create impact on Japan’s export or its economy, so to say.

According to global export-import data, Japan is estimated to export 27,989 tonnes of aluminium plates, sheets and strips to the US in 2018 and earn revenue of US$ 93 million. In 2017, the export volume higher at 35,268 tonnes and yielded revenue of around US$ 136 million, after increasing from 24, 930 tonnes of export volume in 2016. This indicates that Japan had registered an increased volume of aluminium plates, sheets and strips export to the US by 26 per cent from the estimated volume of 2018 and 41 per cent from the actual volume of 2016. On the other hand, 2018 is expected to see an increase in export volume by 12 per cent from 2016. The revenue from the export in 2016 was US$ 97 million, which was, however, higher from the expected revenue of 2018.

The chart below demonstrates Japan’s export to the US in 2016, 2017, and 2018.

The chart below demonstrates Japan’s revenue from export to the US in 2016, 2017, and 2018.

Japan Aluminium Association Chairman Ichiro Okamoto said in an interview, “We have not seen major damages from the U.S. duties.”

“What’s more worrisome is about the U.S. threat on auto tariffs as it will have a huge impact on Japanese industries including aluminium,” he said.

In May, the US President Donald Trump had ordered a national security probe into imports of automobiles and declared his decision to impose additional tariffs on imported automobiles and automobile parts.

Around 15 percent of Japan’s 2 million tonnes of rolled aluminium production goes to the auto sector.

“If trade wars including autos become real, it will give an impact beyond our imagination,” Association Chairman said out of fear.