Trump Touts Lower Aluminum Prices, But Americans Are Still Paying More
(Bloomberg) -- President Donald Trump took a victory lap on Twitter Friday, saying aluminum prices are down about 12 percent since his tariffs were implemented.
While Trump’s figure is mostly accurate, as far as the price of the metal traded on the London Metal Exchange is concerned, the president failed to point out that the impact of tariffs was reflected mostly in the added cost U.S. buyers pay to have the metal delivered. Those premiums have soared 26 percent since he announced the levies on shipments on March 1, 2018, muting the impact of lower global prices.
The price of the metal traded in London has tumbled 12.8 percent amid mounting concerns that a persistent trade war between the U.S. and China may slow global growth, crimping demand for industrial metals including aluminum.
Trump also cited the jobs he created. While Century Aluminum Co. added 205 jobs last year, that’s not enough to make up for the 600 jobs lost at Alcoa Corp., the largest U.S. aluminum producer. In total, the industries involved in making the refined metal added 300 jobs from April to January, or about 0.5 percent to a total of 58,000, according to Emily Crowley, a principal economist at IHS Markit in Washington.
The chief White House economic adviser, Larry Kudlow, and Agriculture Secretary Sonny Perdue have already acknowledged a push within the administration to eliminate the tariffs -- either entirely, or to replace them with quotas.
If Trump decides to replace the tariffs, Canada will likely get a “hard” quota for its aluminum shipments equal to about 70 percent of the annual average exports to the U.S. in the past three years, Harbor Intelligence, an industry researcher, said. That would bar the Canadians from shipping more metal than the volume set in the quota, he said.
Canada will not agree to that quota, David MacNaughton, the nation’s ambassador to the U.S., said in a statement Friday afternoon. A spokesman for Canadian Foreign Minister Chrystia Freeland said in an email that it is in the “best interests” of the U.S. and Canada to lift tariffs on steel and aluminum imposed on each other.
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