U.S. and Canada aluminum groups slam tariffs and point to China

The trade dispute risks diverting attention from what the industry views as a bigger threat: Chinese metal reaching North America through third countries. Photo by CN-STR/AFP via Getty Images

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The United States and Canada should stop targeting each other with aluminum tariffs, according to industry groups representing producers of the metal in both countries, and instead forge a common front against Chinese competition.

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Their comments came as the U.S. and Canada escalated a trade dispute, with Washington maintaining a 50 per cent tariff on Canadian aluminum and Ottawa retaliating with a 50 per cent duty on U.S. imports. The two countries had been negotiating a trade deal that could have lowered U.S. tariffs on Canadian metal, but the talks collapsed at the 11th hour.

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The groups warned that the fight risks undermining investment and disrupting one of North America’s most integrated supply chains. The U.S. relies on imports for roughly 60 per cent of its primary aluminum needs and Canada is by far its biggest foreign supplier.

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Jean Simard, head of the Aluminium Association of Canada, called for a “Fortress North America” that would preserve free trade in aluminum within the region while erecting barriers against metal from non-market economies and cracking down on transshipment.

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Even with new smelters and restarts, the U.S. will remain dependent on imported primary aluminum, he said. “America cannot do it alone,” Simard said during a panel discussion at the CRU/AMU Aluminum Summit in Atlanta, Georgia, on Tuesday.

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Chuck Johnson, chief executive officer of the U.S. Aluminum Association, also backed a regional solution, while acknowledging that President Donald Trump’s 50 per cent Section 232 tariff has created winners as well as losers at home.

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U.S. tariffs have been “very good” for U.S. aluminum producers in the short term, he said, while hurting businesses that pass the additional cost on to customers, such as makers of aluminum foil. Those competing interests have divided the aluminum sector over what should come next. “The industry is fatigued because it’s a moving target,” Johnson said.

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The shifting trade regime is also making companies reluctant to commit capital, potentially complicating Washington’s push to rebuild domestic manufacturing. The uncertainty is making it harder for aluminum producers to commit to long-term investments, Johnson said.

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The U.S. may ultimately need to compromise as it seeks preferential trading arrangements with Canada and Mexico, he said. “We’ve got to find a collective path forward as a region.”

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Simard said that the dispute risks diverting attention from what the industry views as a bigger threat: Chinese overcapacity and metal potentially reaching North America through third countries. Canada is scrutinizing its free-trade agreements for transshipment risks as Chinese companies expand production abroad, including in Indonesia.

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Rather than putting up barriers against each other, the U.S. and Canada should “work together to grow the pie,” Simard said.

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