Cracks emerge in Trump’s Section 232 aluminium tariff wall Report

Insight 15 March 2018

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Report summary

President Trump’s Section 232 directive for aluminium opens up a Pandora’s box of trade conflict and legal confusion. At the time of writing, Canada, Mexico and Australia were exempt from the duties, due to become effective on 23 March. Other countries may well be added before then. In this Insight we assess the real impact on the wider US aluminium industry and investigate the displacement and redirection of primary aluminium flows at a global level. The results suggest that the policy may end up doing more harm than good for the US aluminium sector.

The President’s carrot and stick
Will import tariffs really revive the US primary aluminium smelting industry?
The structure of the US primary aluminium sector before and after tariffs
What about the US downstream aluminium sector?
US Midwest premia and LME prices heading in different directions
Conclusions

Tables and charts

This report includes the following images and tables:

US smelter restart incentive price, pre tariff (assuming US Midwest at ¢9/lb)
US smelter restart incentive price, post 10% tariff (assuming US Midwest at ¢16/lb)
US import requirement of primary aluminium and value added products