The problem is that aluminium items in varying stages of processing could attract the 10% tariffs imposed by the Canadian and US governments every time they cross the border. The risk is heightened due to the integrated nature of American and Canadian manufacturing - for instance, in the automotive sector.
Speaking to Metal Bulletin, Jean Simard, the association’s president and chief executive officer, said he thought that the number of affected aluminium products would be relatively small, with most targeted lines being exported only once. As a result, the association is not pressing the federal government to avoid levying tariffs on all affected re-exports.
Simard said that the imposition of the US tariffs would wipe out gains that the Canadian sector has enjoyed from the recent increase in prices of the US Midwest aluminium premium. This followed the announcement of the Section 232 duties in March (from which Canada initially was exempt), US sanctions against Russian aluminium producer Rusal and the slashing of alumna production at the Alunorte refinery in Brazil. Simard claimed US buyers of Canadian aluminium would insist that the producers pay the new duties, reducing exporting margins dramatically.