On February 10, local time, US President Trump signed an executive order announcing a 25% tariff on all steel and aluminum imported into the United States. Trump said on the same day that there were "no exceptions and exemptions" to the relevant requirements.
During Trump's first term, he imposed a 25% tariff on steel imported into the United States and a 10% tariff on aluminum imported into the United States, and then granted duty-free quotas to trading partners such as Canada, Mexico, the European Union, and the United Kingdom.
Industry insiders said that the United States' general tax increase on products from various countries this time is not directly aimed at a single country, but should be more about using tariffs to boost domestic industries. How much impact will this have on my country's steel and aluminum exports to the United States?
Direct aluminum exports account for a small proportion, and the imposition of tariffs may increase the burden on American consumers.
Regarding the US tax increase on aluminum products, Wen Xianjun, former vice president of the China Nonferrous Metals Industry Association and honorary president of the Shandong Aluminum Association, said: "my country's current exports to the United States are greatly affected by the 'double anti-dumping', with a high comprehensive tax rate and very little export volume to the United States, which mainly affects aluminum products. The United States imposes taxes on importers, and these taxes should be mainly borne by American consumers."
From the perspective of my country's export structure, my country's annual aluminum exports are about 5 million to 6 million tons, accounting for 12.85% of production. In 2023, Mexico will be my country's largest aluminum exporter, accounting for 9.6% of total aluminum exports, the United States and Canada will account for 4.6% and 3.8% respectively, and aluminum exported to the North American Free Trade Zone will account for 18% of my country's total aluminum exports.
Wen Xianjun believes that the development of China's aluminum industry must continue to cultivate new consumer markets in order to boost China's aluminum product exports. China's aluminum consumption is mainly domestic, and the US tax increase policy has little impact on the domestic aluminum market.
From the perspective of the US import structure, according to UNComtrade data, the US will import a total of 1.6482 million tons of aluminum in 2023, of which 420,000 tons, 200,000 tons and 60,000 tons will be imported from Canada, China and Mexico respectively, accounting for a total of 41.7%. The sources of US aluminum product imports are relatively concentrated, with imports from the five major importing countries of China, Mexico, Canada, India and Colombia accounting for 75%, and imports from China accounting for 36%.
In March 2018, based on the results of the investigation, the United States imposed a 10% tariff on global imported aluminum products. It took effect on March 23, and only Canada and Mexico were exempted. At the end of September 2024, the United States will increase the additional tax on some of my country's aluminum products to 25%, and impose a 25% tariff on bauxite exported from my country. The goods whose tariffs are increased from 7.5% to 25% correspond to almost all aluminum products under the 604-7609 project.
At that time, due to the US tariffs on my country's aluminum products, my country's exports to the US were halved, while the total imports from the US remained at about 2 million tons. This is mainly because aluminum imported from other countries made up for the reduction in my country's exports to the US, and my country's products can enter the US through re-export trade from Mexico and Canada.
Li Kui, a non-ferrous metals researcher at Huarong Rongda Futures, said: "In the short term, Trump's comprehensive increase in aluminum import tariffs from various countries will also indirectly affect my country's exports and re-export trade to Mexico, Canada and other countries. However, considering that my country's aluminum has historically faced anti-dumping investigations initiated by many countries, the corresponding anti-dumping duty rate is around 10%-75%. Affected by anti-dumping duties, aluminum exports fell by about 30%-60%. Therefore, under a 25% tariff, aluminum price fluctuations have not been significantly amplified, but in the medium and long term, it will have a certain adverse impact on my country's aluminum export trade."