August 6, 2018 / 8:42 PM / 2 months ago

Alcoa asks U.S. government for tariff exemption on Canadian aluminum

WASHINGTON (Reuters) - Alcoa Corp (AA.N) on Monday asked the U.S. Commerce Department to exempt from tariffs its purchases of 40,000 metric tons of Canadian aluminum used to make beverage cans, adding to thousands of requests for such relief.

FILE PHOTO: An Alcoa aluminum plant is seen in Alcoa, Tennessee, United States April 8, 2014. REUTERS/Wade Payne/File Photo

According to documents posted to its website, Alcoa said no U.S. aluminum producer can meet its specification needs and quality requirements for rolling slabs used at its Warrick, Indiana plant to produce aluminum for can manufacturers.

Alcoa’s application for a waiver from 10 percent tariffs on the Canadian aluminum rolling slabs is the start of an effort to try to roll back the Trump administration’s tariffs on Canadian aluminum imports, a company official said. More such requests are planned, the official said.

Alcoa, the No. 1 U.S. aluminum producer, operates three aluminum smelters in hydropower-rich Quebec, employing about 3,300 people, in addition to its three smelters in the United States.

In an opening shot of growing global trade tensions, the United States imposed global tariffs of 10 percent on aluminum imports and 25 percent on steel imports and a 10 percent tariff on aluminum based on national security grounds, arguing that financially healthy U.S. producers of both metals were needed to keep America safe.

Although most trade and industry experts blame U.S. steel and aluminum producers’ woes on excess output in China, the tariffs also were applied to Canada, the European Union and Mexico in June.

These countries have responded with retaliatory tariffs on U.S. products ranging from motorcycles to bourbon whiskey and ketchup. U.S. Trade Representative Robert Lighthizer has linked a deal to lift the metals tariffs on Canada and Mexico to negotiations over a revamped North American Free Trade Agreement.

Alcoa said in July it will incur as much as $14 million a month in extra expenses, mainly from tariffs levied on aluminum imported from Canada, its biggest supplier.

“Even if all the curtailed smelting capacity in the states was back online and producing metal, the United States would still need to import the majority of its aluminum, and most of it from Canada,” said Tim Reyes, president of Alcoa Aluminum, one of the company’s three business units.

Section 232 tariffs should be removed from Canada and other fair-trading partners, Reyes said.

Chief Executive Officer Roy Harvey told investors in July that Alcoa was in “active discussions” with the Trump administration, the Commerce Department and members of Congress about the elimination of tariffs or getting an exception for Canadian aluminum.

Alcoa on Monday filed five applications for one-year exclusions from Section 232 tariffs on imports of “primary aluminum alloyed slab” that it says is not available from any other U.S. manufacturer.

Additional reporting by David Lawder; Editing by Richard Chang and Grant McCool

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