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Trump re-implementing 10% tariff on aluminum from Canada


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President Trump said Thursday that he has signed an order to re-implement 10% tariffs on Canadian aluminum.

Canadian aluminum has flooded the American market and was poised to "kill all our aluminum jobs," the president said.

“Earlier today I signed a proclamation that defends American industry by reimposing aluminum tariffs on Canada,” Trump said in Ohio after touring a Whirlpool manufacturing facility. “The aluminum business was being decimated by Canada, very unfair to our jobs and our great aluminum workers."

 


I thought this might be relevant because of Fords heavy use of aluminum in the F-150. Could be bad news for Ford if aluminum prices go up as a result.  That said, it could be good for American jobs if it helps protect aluminum jobs here at home.
 

Full Story:

https://www.foxbusiness.com/markets/trump-re-implementing-10-tariff-on-aluminum-from-canada

 

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Ford says about 98% of F Series aluminium comes from the US via Arconis and Novelis.

Arconis supplies aluminium from plants in Tennessee, Iowa, Pennsylvania and Texas.

Novelis gets about a third of its aluminium from Canada, the rest comes from the US.

 

In the case of Ford's manufacturing, I think any tariffs are going to be unhelpful

and just lead to price increases which either get passed onto buyers or hit profit.

Edited by jpd80
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So basically, even though Ford aluminum is basically all american, if other companies that were buying from Canada suddenly can't get it, it COULD potentially leads to shortages here (if we can't produce the lost imports) and the sudden increased demand should also raise the price of our aluminum.

 

I do think it's worth paying a little more, especially if it creates more jobs here. I think we're still hovering at 10% unemployment ?

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2 hours ago, probowler said:

So basically, even though Ford aluminum is basically all american, if other companies that were buying from Canada suddenly can't get it, it COULD potentially leads to shortages here (if we can't produce the lost imports) and the sudden increased demand should also raise the price of our aluminum.

 

I do think it's worth paying a little more, especially if it creates more jobs here. I think we're still hovering at 10% unemployment ?

I think it's mean spirited to go back on a deal (tax exemption) when there's no evidence of it being abused.

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36 minutes ago, jpd80 said:

I think it's mean spirited to go back on a deal (tax exemption) when there's no evidence of it being abused.

 

I would agree, but who do we trust? Do we trust Canada who is looking out for their industry and their citizens? Do we trust the left, who has an interest in opposing Trump and his polices? Or do we trust the President and the Secretary of Commerce that reported an increase in Canadian aluminum imports?

 

Quote

Imports of non-alloyed unwrought aluminum from Canada during June 2019 through May 2020 increased 87 percent compared to the prior twelve-month period and exceeded the volume of any full calendar year in the previous decade.  Moreover, imports of these articles from Canada continue to increase, reaching in June of this year the highest level of any month since I decided to adjust imports of aluminum articles in Proclamation 9704.  The increase in imports of these articles from Canada is principally responsible for the 27 percent increase in total aluminum imports from Canada during June 2019 through May 2020.

 

Assuming Canada was following their end of the agreement, what prompted this sudden action by the President? Is he just randomly trying to hurt Canada? Is there a special interest group involved?

I found a couple stories from canada that detail the issue from their perspective, includes some interesting context for anyone interested in all this.

 

https://www.cbc.ca/news/politics/aluminum-tariffs-trump-lighthizer-canada-1.5624524

https://www.cbc.ca/news/business/trump-aluminum-tariff-1.5677036
 

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A subset of American metals companies have complained that Canadian aluminum has recently been dumped on the U.S. market.

Canadian aluminum-makers have said they switched production during the COVID-19 pandemic as demand for higher-end products crashed, and the resulting aluminum has been sent to the U.S. primarily for storage.

 

 

They're blaming Covid-19 for reducing automative aluminum demand, which caused Canadian producers to switch to producing aluminum ingots which can be more easily stored then melted down again when needed. Basically, contributing the "aluminum dump" to a sudden switch in product type being delivered. One of the articles mentioned US metal producers of taking advantage of the situation to try and lobby for new protectionist policies.  Whatever is going on, It's clearly a pretty complicated issue, that's for sure.

 

Edited by probowler
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The US consumes up to 6 million tons of aluminium per year but only produces about 800,000 tons

most of the 800k coming from older less efficient plants. Smelters just can't stop production without

massive consequences of reduction cells freezing solid so they have to keep producing and delivering

while most other industry is shutdown. Some local producers saw an opportunity to claim dumping

in an election year in the ear of a sympathetic government, saying there's your non-traditional surge

and bingo, the snap-back clause is activated.

 

Storing aluminium as ingots is not necessarily dumping when it cannot be immediately used, further

local value adding processing is required so not an immediate threat to local producers, just a stockpile

to work down over time.

 

In any regard. It won't affect Ford to any massive degree.

Edited by jpd80
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2 hours ago, Bryan1 said:

It's Canada going back on the deal. Chinese aluminum is being routed through Canada to evade import tariffs. 

But since 2018 , Canada has a 25% tariff on imported steel and Alumina from China to avoid  dumping.

Now Canada is retaliating with tariffs designed to hurt US "red states" at the worst possible time.

Edited by jpd80
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21 hours ago, CurtisH said:

If the Canadian companies are producing silver ingots for storage, why are they shipping them to the USA for storage?  Why not store them in Canada?

They are filling contracts with their clients in the US who have seen demand for value added aluminium products

collapse as automakers closed down due to the pandemic. North American smelters switched to producing ingots

as a way of producing aluminium that doesn't lock in the type of grade, that value adding step now gets done by US

companies at a later date

Edited by jpd80
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1. 2020:

https://www.newswire.ca/news-releases/steelworkers-union-hails-victory-in-aluminum-dumping-case-811682301.html

 

Steelworkers Union Hails Victory in Aluminum Dumping Case


NEWS PROVIDED BY

United Steelworkers (USW) 

Jan 16, 2020, 06:00 ET

 

"OTTAWA, Jan. 16, 2020 /CNW/ - The United Steelworkers (USW) union is hailing a ruling by the Canadian International Trade Tribunal (CITT) to prevent the dumping of Chinese extruded aluminum products into the Canadian market.

In its ruling released this week, the CITT renewed a previous order that unfair dumping of subsidized Chinese exports of aluminum extrusion products threatens the viability of Canadian producers and the jobs of their workers."

 

2. This is the Chinese plan.  Send aluminum to Canada to become Canadian ‘aluminum’ to be shipped to the US. But it hurts Canadian companies, too.

 

3. But Canada said it was tariffing China? China can send it to a third country like Britain and then it becomes British steel.

 

4. Also China could pay the Canadian tariffs  and use other unfair practices such as massive subsidies, currency manipulation, or sell it below cost and flood the market to drive everyone out of business.

 

5. This also doesn't address that Canada promised not flood the market WHEREVER it came from before they signed the deal in the first place. And the fact that the deal included steps to monitor for and avoid import surges.

 

6. No evidence? In May 2020 aluminum from Canada surged 87% when compared to the 12 months prior. In June it was the highest since they have been trying to get it down.


7. But Trump is mean and going back on the deal? Wash Post reports: "Trump’s reimposition of tariffs doesn’t violate the new trade deal — known as the United States-Mexico-Canada Agreement — because the ability to impose tariffs is covered in a side deal.

 

8. I know some people like to put blame on the US for everything and excuse socialist Canada and take the side of Communist China, but it is more complicated than just one side is being unfair, orange man mean.

 

9. As for Ford F150s, Ford address this on the 2015 F150. Cost goes up only a little for alum. They sell one extra gizmo and it pays for it and they make even more profit than before without the added cost of aluminum.

 

 

 

Edited by Bryan1
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All aluminium from China is subject to 25% tax in Canada.

The rise in Alumina coming from Canada in May was temporary as it dropped12% in June and 40% in July.

This is a knee jerk over reaction pushed for by a few greedy US producers with an agenda of self interest.

Edited by jpd80
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That's just the spot price, a lot of long term contracts are locked into a set priceb but yes,

some contracts take spot price or are a mix of that and an agreed price that can be varied.

 

What the US really wanted to do was stop heavily subsidised Chinese Aluminium sneaking into the USA

but it's now causing unforseen collateral damage in unexpected areas, the best way would be to completely

point of origin Chinese Aluminium.

Edited by jpd80
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It could be a political tactic to try and change the topic from Covid-19. With Canada responding, this could lead to other tariffs being implemented at a time where borders are closed to non-essential travel and cross border personal shopping has pretty much come to a halt.

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15 hours ago, Colbytech said:

It could be a political tactic to try and change the topic from Covid-19. With Canada responding, this could lead to other tariffs being implemented at a time where borders are closed to non-essential travel and cross border personal shopping has pretty much come to a halt.

 

Canada just announced that they don't want dual citizenship persons going back and forth across the border anymore. Maybe a Wall is coming next to keep infected Americans out. How ironic. It has been estimated that at least 50 million Americans have covid. Good job Trump.

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9 minutes ago, silvrsvt said:

 

So people being idiots (like the idiot that had a pop up party of 300 or so people down the street from me) is Trumps fault?!

 

Yes.  Anything bad that happens is Trump's fault even if he did everything reasonable to stop it or had no influence on it. 

 

People are also mad at our Governer in GA because he won't mandate masks.  As if the people who currently refuse to wear one will suddenly start wearing one because the government says they have to.   It's the same people who mistakenly think that outlawing AR-15s will somehow stop people from wanting to kill other innocent people.   They like to pass laws because it makes them feel better even if the laws don't accomplish the intended outcome.

 

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2 hours ago, FordBuyer said:

 

Canada just announced that they don't want dual citizenship persons going back and forth across the border anymore. Maybe a Wall is coming next to keep infected Americans out. How ironic. It has been estimated that at least 50 million Americans have covid. Good job Trump.


4b4yum.jpg

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30 minutes ago, akirby said:

Would you get on a plane if there was only a 99.6% chance of not crashing?   That means 4 planes out of 1000 crash, or about 160 crashes every day.

That actual thought hit me on my first trip to the US back in 1993,

we were half way across the pacific in pitch dark and I thought,

oh well.....,,

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12 hours ago, akirby said:

 

Yes.  Anything bad that happens is Trump's fault even if he did everything reasonable to stop it or had no influence on it. 

 

People are also mad at our Governer in GA because he won't mandate masks.  As if the people who currently refuse to wear one will suddenly start wearing one because the government says they have to.   It's the same people who mistakenly think that outlawing AR-15s will somehow stop people from wanting to kill other innocent people.   They like to pass laws because it makes them feel better even if the laws don't accomplish the intended outcome.

 

 

Compliance (mask wearing) did increase once the government made it mandatory, where I am in Canada. Went from ~65% to ~98% compliance.

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25 minutes ago, valve said:

 

Compliance (mask wearing) did increase once the government made it mandatory, where I am in Canada. Went from ~65% to ~98% compliance.

 

I think it's the tale of two countries and more likely a result of the divide, that from the outside, continues to be growing deeper and deeper.

 

Leadership always comes from the top, especially in times of crisis. I think if Trump had worn a mask, as his advisors supposedly said to do, things might look different. It's really hard to say though. I'm just going by the statements of some good friends of mine (Republicans) who live in the US, and are dead set against being told what to do.  I think in Canada, it's like being told to wear seatbelts in the car, stop at red lights and stop signs, don't drink and drive, etc. It's another thing that is being managed for the greater good.

 

Masks aren't going to beat this thing, again they are just trying to slow it down so that the hospitals and the health care system isn't overwhelmed as people start to go back to work and day-to-day activities (including figuring out how to safely get kids back to school).

 

Anyway, just my thoughts on it.

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