U.S. Tariff to Cause Short Spike in EU Aluminum Imports

The impact of U.S. President Donald Trump’s 10% tariff on aluminum imports would be noticeable in the European Union within three to four months of being implemented, European Aluminium Director General Gerd Gotz has said.

Speaking during a press conference on the Section 232 tariffs in Brussels, Gotz said primary aluminum displaced from the U.S. market from key production hubs such as Russia and the Middle East would almost immediately find their way to the EU. And within six to nine months, Europe would see an increase of roughly 35% in semi-fabricated aluminum products that previously had been bound for the U.S.

“Imposing tariffs on aluminum…is the wrong tool and does not fit the real challenge we face — and that’s Chinese overcapacity and nothing else,” said Gotz.

He was joined at the conference, organized by the European Steel Association (Eurofer), by a handful of European metals, labor and government officials in denouncing the 232 plan. Chinese aluminum overcapacity stood at 11 million mt in 2017 — 40% of total world production and five times more than European production last year, Gotz said. The tariffs would further imbalance global trade flows, undermine U.S./EU trade synergies and deviate attention and political momentum from tackling China’s overcapacity, he said.

“The 232 announcement will spark distrust and destabilize global trade flows. I can hardly understand who can benefit from such a move — probably too few and only for a very short time,” Gotz said.

The situation presents a potential trade crisis for Europe, said Gotz, but he added “this crisis can also be seen as an opportunity” to work with the U.S. to address global overcapacity.

“…Should the U.S. act…we call on the European Commission, shoulder to shoulder with its member states, to defend its aluminum industry by taking appropriate and commensurate measures, including immediately implementing measures to monitor market developments and, if necessary, do safeguard measures,” Gotz added.