Politics, pandemics and Russian aluminum: why Canada faces fresh US tariffs - Terrace Standard | Canada News Media
Connect with us

Politics

Politics, pandemics and Russian aluminum: why Canada faces fresh US tariffs – Terrace Standard

Published

 on


Why the United States chose to taint the debut of North America’s celebrated new trade deal by threatening fresh tariffs against Canadian aluminum, only President Donald Trump and trade emissary Robert Lighthizer can say for sure.

But industry insiders point to a convergence of disparate factors: COVID-19, international metals arbitrage, presidential politics and $16.3-billion worth of the stuff from Russia, the world’s second-largest producer.

Aluminum is one of the elemental components of the Canada-U.S. trade relationship, a bond forged in the blast furnace of the American war effort. Experts say smelters on both sides of the border stand to benefit from the U.S.-Mexico-Canada Agreement, which took effect Wednesday and imposes new requirements for regionally sourced metals.

Jean Simard, president and CEO of the Aluminum Association of Canada, is at a loss to understand why his industry is being targeted by the White House for the second time in two years. The U.S. has nowhere near the capacity to meet growing demand.

“It doesn’t make sense,” Simard said. ”It’s like an oxymoron. It’s so contradictory to the spirit of USMCA.”

The answer may lie in how aluminum production works around the world, and how traders and marketers profit from it.

Because they traffic in white-hot liquid metal, aluminum smelters can’t simply shut down when demand for the product dries up, which is what happened to Canadian producers — who provide the bulk of the metal to U.S. markets — when the pandemic forced auto manufacturers to idle their assembly lines.

Smelters pivoted away from the specialized premium products demanded by the auto sector and instead produced the more generic primary aluminum known as P1020, shipping it to the only storage warehouses that are cost-effective, Simard said: facilities in the U.S., which is where the lion’s share of the North American aluminum market is located.

The ensuing “surge” in Canadian imports caught the attention of the U.S. trade representative’s office — or more specifically, the two U.S. producers that raised a red flag: Century Aluminum and Magnitude 7 Metals, which together comprise a Trump-friendly lobbying effort known as the American Primary Aluminum Association.

“The surge of Canadian metal has a caused the price to collapse and is endangering the future viability of the U.S. primary industry,” the association wrote to Lighthizer in May.

“Action — real action, not mere monitoring, and endless discussions in multinational fora — is needed now if the United States is to save what is left of its primary aluminum industry.”

A separate group — the Aluminum Association, which represents dozens of U.S. and international producers — disagrees, calling Canadian suppliers an integral element of the North American supply chain and a key component of the industry’s success.

Politics is undoubtedly a factor: two of Century’s four smelters are in Kentucky, while Magnitude 7 operates in Missouri, two states vital to Trump’s electoral fortunes.

“These are the states that keep campaign managers up at night,” said Gerald McDermott, an international business professor at the University of South Carolina.

A spokesman for the American Primary Aluminum Association did not immediately respond to a request for comment Friday.

Glencore Plc, a metals trader and producer based in Switzerland, holds a 47 per cent stake in Century. Magnitude 7, founded by a former Glencore aluminum trader, operates a single Missouri plant that won a new lease on life after Trump’s first round of tariffs in 2018, but which warned in February it was on the verge of shutting down.

And Glencore holds the exclusive rights to sell Russian-made aluminum in the U.S., having agreed in April to spend $16.3 billion over the next five years on up to 6.9 million tonnes of the metal from Rusal, the second-largest aluminum producer in the world.

Glencore is also a major player in the world of metals arbitrage — buying commodities at the lowest price possible, then shipping and storing them before selling on a futures contract in hopes of a higher price. The pandemic has fuelled a global collapse in the price of aluminum, Simard said, while the threat of tariffs has had the opposite effect.

“What do the traders do? They buy the metal at a very low price because the crisis is what brought you to pivot to this position, and they warehouse it when interest rates are very low because it’s a crisis,” Simard said.

“The key player over and above everybody else is Glencore.”

Rusal, once controlled by the Russian billionaire oligarch Oleg Deripaska, was subject to U.S. sanctions since Moscow’s annexation of Crimea in 2014 — sanctions that were lifted in January 2019 as part of an extensive restructuring that saw Deripaska relinquish control of the company. Glencore was involved, too, swapping shares in Rusal for a direct stake in its parent company, En+.

The USTR and the Trump administration ”cannot be unaware of the corporate structure around Rusal and Glencore. I would doubt it very much,” said Simard.

A spokesman for Glencore declined to comment Friday.

The Canadian aluminum industry, the bulk of which is located in Quebec, owes its origins to soaring American demand for the metal in the months prior to the U.S. entry into the Second World War — a partnership that cemented Canada’s role in the continental military industrial base. Is the Trump administration trying to end that relationship?

“It’s worth raising the question,” Simard said.

Trump’s disdain for Canada and Prime Minister Justin Trudeau has long been an open secret — “Trudeau’s a ‘behind-your-back’ guy,” former national security adviser John Bolton’s explosive new book quotes the president saying — and with an uphill battle for re-election looming, he may be looking to score political points, McDermott said.

“Why is the Trump administration doing what it’s doing? The short answer is it’s in a free fall,” he said.

“It’s got to show that it’s doing something for these Midwestern manufacturing states, and that means getting tough with non-U.S. people. What better thing, then, to piss off the Canadians?”

James McCarten, The Canadian Press

Like us on Facebook and follow us on Twitter.

Want to support local journalism? Make a donation here.

Get local stories you won’t find anywhere else right to your inbox.
Sign up here

Let’s block ads! (Why?)



Source link

Politics

NDP and B.C. Conservatives locked in tight battle after rain-drenched election day

Published

 on

 

VANCOUVER – Predictions of a close election were holding true in British Columbia on Saturday, with early returns showing the New Democrats and the B.C. Conservatives locked in a tight battle.

Both NDP Leader David Eby and Conservative Leader John Rustad retained their seats, while Green Leader Sonia Furstenau lost to the NDP’s Grace Lore after switching ridings to Victoria-Beacon Hill.

However, the Greens retained their place in the legislature after Rob Botterell won in Saanich North and the Islands, previously occupied by party colleague Adam Olsen, who did not seek re-election.

It was a rain-drenched election day in much of the province.

Voters braved high winds and torrential downpours brought by an atmospheric river weather system that forced closures of several polling stations due to power outages.

Residents faced a choice for the next government that would have seemed unthinkable just a few months ago, between the incumbent New Democrats led by Eby and Rustad’s B.C. Conservatives, who received less than two per cent of the vote last election

Among the winners were the NDP’s Housing Minister Ravi Kahlon in Delta North and Attorney General Niki Sharma in Vancouver-Hastings, as well as the Conservatives Bruce Banman in Abbotsford South and Brent Chapman in Surrey South.

Chapman had been heavily criticized during the campaign for an old social media post that called Palestinian children “inbred” and “time bombs.”

Results came in quickly, as promised by Elections BC, with electronic vote tabulation being used provincewide for the first time.

The election authority expected the count would be “substantially complete” by 9 p.m., one hour after the close of polls.

Six new seats have been added since the last provincial election, and to win a majority, a party must secure 47 seats in the 93-seat legislature.

There had already been a big turnout before election day on Saturday, with more than a million advance votes cast, representing more than 28 per cent of valid voters and smashing the previous record for early polling.

The wild weather on election day was appropriate for such a tumultuous campaign.

Once considered a fringe player in provincial politics, the B.C. Conservatives stand on the brink of forming government or becoming the official Opposition.

Rustad’s unlikely rise came after he was thrown out of the Opposition, then known as the BC Liberals, joined the Conservatives as leader, and steered them to a level of popularity that led to the collapse of his old party, now called BC United — all in just two years.

Rustad shared a photo on social media Saturday showing himself smiling and walking with his wife at a voting station, with a message saying, “This is the first time Kim and I have voted for the Conservative Party of BC!”

Eby, who voted earlier in the week, posted a message on social media Saturday telling voters to “grab an umbrella and stay safe.”

Two voting sites in Cariboo-Chilcotin in the B.C. Interior and one in Maple Ridge in the Lower Mainland were closed due to power cuts, Elections BC said, while several sites in Kamloops, Langley and Port Moody, as well as on Hornby, Denman and Mayne islands, were temporarily shut but reopened by mid-afternoon.

Some former BC United MLAs running as Independents were defeated, with Karin Kirkpatrick, Dan Davies, Coralee Oakes and Tom Shypitka all losing to Conservatives.

Kirkpatrick had said in a statement before the results came in that her campaign had been in touch with Elections BC about the risk of weather-related disruptions, and was told that voting tabulation machines have battery power for four hours in the event of an outage.

— With files from Brenna Owen

This report by The Canadian Press was first published Oct. 19, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Politics

Breakingnews: B.C. Conservative Leader John Rustad elected in his riding

Published

 on

 

VANDERHOOF, B.C. – British Columbia Conservative Leader John Rustad has been re-elected in his riding of Nechako Lakes.

Rustad was kicked out of the Opposition BC United Party for his support on social media of an outspoken climate change critic in 2022, and last year was acclaimed as the B.C. Conservative leader.

Buoyed by the BC United party suspending its campaign, and the popularity of Pierre Poilievre’s federal Conservatives, Rustad led his party into contention in the provincial election.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Politics

Early tally neck and neck in rain-drenched British Columbia election

Published

 on

 

VANCOUVER – Predictions of a close election were holding true in British Columbia on Saturday, with early returns showing the New Democrats and the B.C. Conservatives neck and neck.

Conservative Leader John Rustad was elected in Nechako Lakes, and 20 minutes after polls closed, his party was elected or leading in 46 ridings, with the NDP elected or leading in 45.

Among the early winners were the NDP’s Ravi Kahlon in Delta North and Niki Sharma in Vancouver-Hastings, as well as the Conservatives’ Bruce Banman in Abbotsford South.

It was a rain-drenched election day in much of the province.

Voters braved high winds and torrential downpours brought by an atmospheric river weather system that forced closures of several polling stations due to power outages.

Residents faced a choice for the next government that would have seemed unthinkable just a few months ago, between the incumbent New Democrats led by David Eby and Rustad’s B.C. Conservatives, who received less than two per cent of the vote last election

Green Leader Sonia Furstenau has acknowledged her party won’t win, but she’s hoping to retain a presence in the legislature, where the party currently has two members.

Elections BC has said results are expected quickly, with electronic vote tabulation being used provincewide for the first time.

The election authority expected most votes to be counted by about 8:30 p.m., and that the count would be “substantially complete” within another half-hour.

Six new seats have been added since the last provincial election, and to win a majority, a party must secure 47 seats in the 93-seat legislature.

There had already been a big turnout before election day on Saturday, with more than a million advance votes cast, representing more than 28 per cent of valid voters and smashing the previous record for early polling.

The wild weather on election day was appropriate for such a tumultuous campaign.

Once considered a fringe player in provincial politics, the B.C. Conservatives stand on the brink of forming government or becoming the official Opposition.

Rustad’s unlikely rise came after he was thrown out of the Opposition, then known as the BC Liberals, joined the Conservatives as leader, and steered them to a level of popularity that led to the collapse of his old party, now called BC United — all in just two years.

Rustad shared a photo on social media Saturday showing himself smiling and walking with his wife at a voting station, with a message saying, “This is the first time Kim and I have voted for the Conservative Party of BC!”

Eby, who voted earlier in the week, posted a message on social media Saturday telling voters to “grab an umbrella and stay safe.”

Two voting sites in Cariboo-Chilcotin in the B.C. Interior and one in Maple Ridge in the Lower Mainland were closed due to power cuts, Elections BC said, while several sites in Kamloops, Langley and Port Moody, as well as on Hornby, Denman and Mayne islands, were temporarily shut but reopened by mid-afternoon.

Karin Kirkpatrick, who is running for re-election as an Independent in West Vancouver-Capilano, said in a statement that her campaign had been in touch with Elections BC about the risk of weather-related disruptions, and was told that voting tabulation machines have battery power for four hours in the event of an outage.

West Vancouver was one of the hardest hit areas for flooding, and Kirkpatrick later said on social media that her campaign had been told that voters who couldn’t get to a location to cast their ballot because of the extreme weather could vote through Elections BC by phone.

— With files from Brenna Owen

This report by The Canadian Press was first published Oct. 19, 2024.

The Canadian Press. All rights reserved.

Source link

Continue Reading

Trending

Exit mobile version