The United States is once again threatening to spark a fresh tariff war with Canada over aluminum exports, despite the debut of a renegotiated North American trade agreement that was supposed to usher in stability in the midst of an international economic crisis.
Precisely why remains a mystery to trade and industry insiders, although it’s likely the result of a convergence of disparate factors: COVID-19, international metals arbitrage, President Donald Trump’s re-election campaign and US$16.3-billion worth of Russian aluminum.
“It doesn’t make sense,” said Jean Simard, president and CEO of the Aluminum Association of Canada, coming as it does with the coming into force of USMCA – the U.S.-Mexico-Canada Agreement, which formally replaced NAFTA this week.
“It’s like an oxymoron. It’s so contradictory to the spirit of USMCA.”
There’s little doubt the aluminum industry, and in particular Canadian suppliers, stand to benefit over the long term from the USMCA’s requirements for regionally sourced metals, said Doug Hilderhoff, a Pittsburgh-based principal analyst at commodities research firm CRU Group.
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