Industry reacts to Section 232 shift to full-value tariff on derivatives

While the prices on some products will likely change, CRU Group doesn’t expect the changes to materially move domestic prices. (CRU is the parent company of AMU.)

“Overall, I don’t think it’s going to have a huge effect over what we had already thought was going to come from Section 232 — we’ll still get the higher pricing,” Matthew Abrams, senior analyst for CRU, told AMU.

He noted the changes should help simplify imports.

“There were some reports that were being thrown our way of both product being held up at the border, and some importers playing a lot of games with the reported metal value,” Abrams said.

“If you look at particularly the aluminum set, there were products being imported that had a lower price than the baseline LME metal price, as far as their customs value that was being reported. So I think there were some that were taking advantage of that metal content requirement. This should take that out of the market.”

The Aluminum Association praised the changes.

“In particular, we applaud the move to value aluminum-containing products based on their full value rather than only their aluminum content,” Charles Johnson, president and CEO of the trade organization said in a statement. “This change closes a critical loophole that previously allowed unfairly traded aluminum to enter the US market through downstream goods. We also support efforts to reduce tariff burdens on imported specialty equipment needed for new plants and operations.”

Still, Johnson noted areas of the tariff program that need to be addressed.

“In some markets, the new valuation regime may incentivize importing certain aluminum-intensive products, contrary to the spirit and intention of the rule,” Johnson said.

Century Aluminum also said the changes will close some loopholes.

“In some instances, importers declared only the value of raw steel and aluminum while excluding value added through processing, thereby lowering the tariff owed and disadvantaging domestic manufacturers. The order clarifies that importers must declare the full value of covered products, promoting consistent enforcement and fair competition across the aluminum supply chain,” the Chicago-based producer said in a statement.

Downstream users were more critical of the changes.

Scott Breen, president of the Can Manufacturers Institute, said the Trump administration’s actions keep costs high to make metal cans in the US and incentivize imports.

“In our derivative inclusion requests, we asked President Trump to level the playing field for America’s farmers and can manufacturers, who have been forced under the high Section 232 metal tariffs to unfairly compete against foreign-filled canned foods and beverages not subject to the same tariffs. Instead, these tariff rate adjustments keep the status quo, solidifying a win for foreign canned goods — the opposite of an America First trade agenda.”

Denise Bode, coordinator for the American Fruit and Vegetable Coalition said, “Already, more than a dozen American fruit and vegetable canners have been driven out of business by cheap foreign imports. America has become a net food importer, and the lack of action to stop these imports is making this trade imbalance even worse.”

The Brewers Association also was critical of the changes.

“By continuing to tariff key packaging components such as sheet aluminum, the administration’s policy taxes domestic production while now allowing importers to bring in finished beer in lower or tariff-free cans,” said Bart Watson, association president and CEO. “We believe the solution is to lower costs for American producers, and ultimately consumers, by creating a lower tariff bridge while more American capacity for domestic aluminum comes online.”