Aluminum industry in Japan wants the United States to scraps the plans to impose tariffs on the metal since it would hurt the businesses and it would increase the volatility in the steel markets, causing increased uncertainty for future trade.
Last week, U.S. President Donald Trump announced that he would enforce a 25 percent tariff on imported steel and a 10 percent levy on imported aluminum to protect U.S. producers, the announcement risked the retaliation from major trade partners, such as China, Europe, and Canada.
“We want Trump to abandon the plan,” stated Yoshihisa Tabata, executive director of the Japan Aluminum Association.
“The U.S. is the second-biggest exporting market after China for Japanese aluminum producers and the high duties will directly impact on their business,” Tabata added.
Last year, Japan has produced 2.07 million tonnes of rolled and extruded aluminum. Japan has also exported 27,000 tonnes to the United States out of total exports of about 243,000 tonnes.
“If the new tariffs were slapped, low-end commodities among Japanese aluminum products will be quickly replaced by U.S.-made products although high-end aluminum may take a while to be switched,” stated Tabata.
According to Tabata, the tariffs will cause higher volatility in the prices of metals and in the premiums that are paid by buyers on top of exchange prices to cover the insurance and the cost of delivery.
“Producers and buyers will have to face unexpected changes in aluminum prices and premiums going forward,” said Tabata. “If the U.S. tariffs prompt retaliation from other countries and triggers a trade war, aluminum output will eventually shrink as producers will be making products only to meet local demand.”
Brewer Companies Are Not Happy with Trump’s Tariff
Meanwhile, big brewery companies such as MillerCoors, who depend heavily on aluminum are not pleased with the new policy of President Trump.
According to the statement of MillerCoors officials on its Twitter account, “We are disappointed with President Trump’s announcement of a 10% tariff on aluminum. While we won’t know the details for a week, the Department of Defense recently reported that aluminum does not cause any national security issues.”
The companies think that the 10 percent tariff on aluminum will have an impact on the 2 million jobs that are dependent on the beer industry of the U.S.
On the other hand, the Aluminum Association had formerly expressed its concerns about the potential tariffs. According to the head of the association, Mitsuru Okada, any U.S. trade action to curb imports may end in surplus supply elsewhere and prompt a chain-reaction of retaliation by other nations.
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