PPAI Joins Trade Groups In Pushing Back Against Proposed Canadian Aluminum Tariff Increases

PPAI has joined with 17 organizations representing a diverse and extensive collection of industries in a letter to the White House in response to the Administration’s consideration of ending the Section 232 country exemption of Canadian aluminum imports. The letter calls for the exemption to remain in place and highlights the harm that a tariff or quota on Canadian aluminum would pose for American businesses.

In the letter, the signatories recognize that President Trump wants to support U.S. smelters, especially in the face of Chinese aluminum overproduction, but notes that a tariff or quota on Canadian aluminum will not help with that problem and only makes all the aluminum in the country significantly more expensive.

As the letter spells out: “When tariffs first went into effect, some thought foreign smelters would pay the tariffs and end-users in this country would feel little or no effect. That is not how things turned out. All users of aluminum in the United States—from large enterprises to thousands of small businesses—pay a tariffed price for all the aluminum they purchase. When a tariff actually applies, sellers add a tariff surcharge onto the bill. Even when a tariff does not apply, sellers charge aluminum users a premium that includes a tariff on all the aluminum they buy. In some cases, aluminum users are paying a tariff twice; once as a surcharge and again as part of the premium. In other cases, they pay a premium with the tariff on metal, such as domestic scrap, that is actually exempt from the tariff. This money goes to the seller, not the Treasury, and payment of the premium is non-negotiable.”

The premium with the tariff currently stands at nine cents per pound of metal. The premium is expected to jump to 14-16 cents per pound if the U.S. imposes a tariff or quota on aluminum from Canada.

The letter implores the Administration to consider the financial impact a tariff or quota on Canadian aluminum will have on American manufacturers of all sizes and notes that many are already struggling due to the effects of COVID-19 on the economy. And it asks that the Administration work with the signatories to explore more effective, less harmful ways to address these problems in a way that benefits both American end users and smelters.

filed under July 2020
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