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U.S. Cancels Tariffs on Canadian Aluminum

Sept. 15, 2020
One day before Canadian counter-tariffs were to take effect, the USTR rescinded 10% duties imposed last month on primary aluminum ingot. The U.S. said it expects import totals to return to normal levels.

The U.S. Trade Representative's office announced an end to the 10% tariffs imposed in August on imports of primary aluminum ingot (P1020 aluminum) from Canada. USTR noted that, after consultation with the Canadian government, it "determined that trade in non-alloyed, unwrought aluminum is likely to normalize in the last four months of 2020, with imports declining sharply from the surges experienced earlier in the year. 

"Average monthly imports are expected to decline 50% from the monthly average in the period of January through July," USTR continued, in the range from 70,000 to 83,000 tons/month.

USTR presented a forecast of Canadian P1020 aluminum imports through December, adding that it will review whether actual shipments match the expectations.  "If actual shipments exceeded 105% of the expected volume for any month during the four-month period, then the United States will impose the 10% tariff retroactively on all shipments made in that month," USTR noted.

Aluminum producers were largely opposed to the tariffs, though U.S.-based Century Aluminum had supported the move. "This is a positive step that ensures the North American aluminum supply chain remains strong in the face of challenging global conditions," Rio Tinto Aluminum CEO Alf Barrios said in a statement to Reuters.

President Trump installed the tariffs last month using the Dept. of Commerce's Section 232 authority — the same method used to impose tariffs in 2017 and subsequently removed with the implementation of the U.S.-Mexico-Canada Agreement (USMCA). Section 232 of the Trade Expansion Act of 1962 allows the president to adjust import levels, through tariffs or quotas.

The Canadian government responded forcefully in August, and was due to implement $2.7 billion in tariffs on United States imports as of September 16 in retaliation.

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