Hulamin says new 25% US tariff on aluminium imports likely to improve its competitiveness
JSE-listed aluminium producer Hulamin says the 25% duty on aluminium imports into the US will have no impact on its competitive position in the US market as all its competitors will be subject to the same 25% tariff.
Hulamin derives about 11% of its rolled products volumes from exports to the US. The company’s exports to the US have historically been subject to import duties which comprised a base duty, a Section 232 (s232) duty and an anti-dumping duty.
The s232 import duties were initially imposed in 2018 at a flat rate of 10% on all imports into the US. After the imposition of the s232 duty, several markets – including the EU, Japan, Mexico and Canada – received an exemption from this duty.
Aluminium imports from these exempted countries were subject to a 0% duty in terms of s232. However, Hulamin was subject to the 10% flat rate duty introduced in 2018.
The new 25% duty is not in addition to the 10% duty Hulamin previously had to pay but replaces that duty in its entirety. This means that imports from exempted countries will, going forward, also be subject to a s232 duty of 25%.
The base duty and anti-dumping duties payable on exports by Hulamin to the US remain unchanged.
As other countries' exemptions to the s232 duties will be removed, Hulamin expects its competitive position will improve. Accordingly, the expectation is that volumes supplied to the US, going forward, and the margins achieved thereon, will remain unchanged.
However, the company warned that the imposition of tariffs by the US was a dynamic situation and that future changes in the US tariff regime could impact these views.
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