China’s government has identified aluminum scrap as one of 128 items imported from the United States on which a tariff will be placed if the U.S. enacts tariffs of its own. While 120 of the items will be slapped with a 15 percent duty, aluminum scrap is one of just eight that will face a 25 percent tariff.
According to a brief summary of Beijing’s proposed actions posted on the website of China Daily, considered to be a state-affiliated news outlet, aluminum scrap is joined on the steep tariff list by American pork and pork products.
Online coverage by the New York Times indicates China’s Vice Premier Liu He communicated the moves Saturday, March 24, 2018, to U.S. Secretary of the Treasury Steven Mnuchin.
According to the Times, Liu indicated the tariffs would target some $3 billion worth of American goods (if the aluminum scrap, pork and other items on the list—including steel pipes-were to be purchased at current volumes).
U.S. Department of Commerce statistics posted by the U.S. Geological Survey (USGS) indicate some 820,000 metric tons of aluminum scrap exported from the U.S. in 2017 went to China. That represents 52 percent of the total 1.57 million metric tons shipped out in 2017.
According to statistics gathered by the Washington-based Institute of Scrap Recycling Industries (ISRI), China imported more than 2 million metric tons of aluminum scrap each year between 2007 and 2015.
That scrap came from several nations, but considering the U.S. has been the world’s leading aluminum scrap exporter each year since at least 2005 (per the same set of statistics), a healthy percentage of China’s imports each year comes from the U.S.
ISRI has issued a brief statement regarding the 25 percent import tariff that reads in part, “In 2017, the United States exported more than $1.1 billion worth of aluminum scrap to China, [with aluminum scrap having] been in a positive trade balance for more than a decade. The Chinese government’s announcement will impact this significant U.S. scrap export, spurring concern that exports of additional scrap commodities could be impacted in future announcements.”
The association continues, “A 25 percent tariff would mean a nearly $300 million price burden on a trade relationship that represents nearly 25 percent of the entire world’s trade in aluminum scrap.”
Also published over the weekend of March 23-25, an online report from Reuters indicates negotiators from the U.S. and the European Union have urged the World Trade Organization (WTO) to insist to China that it delay a battery of scrap import restrictions it has imposed.
The Reuters article recounts portions of a meeting of the WTO’s Council for Trade in Goods, which took place Friday, March 23. Per the news service, a U.S. representative said, “China’s import restrictions on recycled commodities have caused a fundamental disruption in global supply chains for scrap materials.”
That viewpoint reportedly was seconded by EU representatives in attendance at the same meeting, with an EU representative “questioning the science” behind China’s lower contamination levels.
China’s delegate at the meeting offered little assurance of compromise, according to the Reuters report, stating that each country had a responsibility to handle its own “waste" and that the nation “is seeking a path toward harmonization of man and nature.”