US trade dispute may put Jamaica’s alumina exports into distress

Jamaican Minister of Foreign Affairs and Foreign Trade Kamina Johnson Smith believes that Jamaica’s alumina exports are likely to be affected by the ongoing trade dispute between the United States and other countries. On Tuesday, June 19, she briefed to a press at the foreign ministry in New Kingston that US’ move to restrict its aluminium and steel imports from other countries could disrupt Jamaica’s supply chain, besides affecting Jamaica’s trading partners.

Johnson Smith further explained to the members of the media that none of the countries to which Jamaica exports its alumina are exempt from the metal tariffs. For example, Jamaica exports alumina to China, which the latter uses to make aluminium and then supply to the US.

“I want to recall that while Jamaica does not produce or export either of these products, we do produce the primary inputs, bauxite alumina. More than 75 per cent of our bauxite goes to the US where they are expanding their manufacturing capacity, and our bauxite is tariff-exempt under the Caribbean Basin Initiative. So our bauxite at this time is protected. Our alumina, however, is mostly exported to countries affected by these tariffs on steel and aluminium, including China, the EU, Canada, and Mexico. So, at the time I spoke in the Senate, these countries were all exempt and we were monitoring developments and our monitoring continues, but now it is monitoring of the retaliatory measures being taken by these countries as we look to see how the elephants' dance will unfold,” the minister said.

However, Johnson Smith opined that the mention of a trade war between the United States and other countries is a matter of speculation because according to her, there is still no certainty whether retaliatory measures would force a negotiation or if countries would change their export, import markets. It is rather a fundamental issue of overcapacity in aluminium and steel on the global market, which the US is seeking to address unilaterally.

In the meantime, the minister pointed out that while the United States postponed its sanctions against the Russian aluminium oligarchs, including the UC Rusal, the ministry sought to work with Office of Foreign Assets Control (OFAC) to ensure to protect Jamaica from any kind of direct impact in the future.