Whether the President of the United States Donald Trump wants it or not, there are high chances that China may get benefits from the aluminium tariffs. This probably was not the intentions behind starting the trade war, but Trump may have to witness China winning the war. Some of the major winners from the 10 percent import tax will be China’s producers.
When Trump started the war, he imposed heavy duties on the Chinese aluminium companies. However, he may have overlooked that some of the companies may get other benefits that the U.S. companies will never get. The Trump tariffs, the strict measures against Rusal, a major Russian producer of aluminium as well as a strike at Alcoa’s alumina and bauxite operations in Western Australia are set to disrupting the aluminium market.
Trade War In Favor Of China?
Recently, Trump decided to throw double tariffs on aluminium from Turkey. In the aftermath, the companies that were in fear for the aluminium deficit are now concerned regarding the risk of supply disruption.
Rusal, the company is responsible for the production of 1.87 million tonnes of aluminium and is a major supplier for not only the U.S. but also other countries in the world. This company is now concerned that it may have to stop the productions and pay tariffs, if the agreement with the U.S. sanctions is not reached. Trump has given Rusal’s customers in the U.S. the deadline of October 23 to end their relations. If the deal is not reached or get extended, the aluminium market will face severe disruptions. On the other hand, China’s aluminium producers have some spare capacity and they are able to produce aluminium to use in beverage cans and motor cars. Reuters reported that China’s aluminium output ramped up in June to 2.83 million, increased by 1.6 percent compared to production in May. Thus, the China-U.S. trade war is hurting the United States aluminium market than China.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]