US to impose 200% tariff on aluminum from Russia: White House

US to impose 200% tariff on aluminum from Russia: White House
FILE PHOTO: Aluminium ingots are seen stored at the foundry shop of the Rusal Krasnoyarsk aluminium smelter in Krasnoyarsk, Russia October 3, 2018. REUTERS/Ilya Naymushin/File Photo

WASHINGTON: The United States will impose a 200 per cent tariff on aluminum and derivatives produced in Russia from Mar 10, the White House said on Friday (Feb 24), effectively a ban as it announced sanctions on the anniversary of Russia’s invasion of Ukraine.

The United States will also apply a 200 per cent tariff on aluminum imports of primary aluminum produced in Russia from April 10.

Russian aluminum is produced by Rusal, which accounts for about 6 per cent of global supplies.

“Alcoa welcomes the imposition of tariffs by the US government on Russian aluminum,” the US aluminum producer said. “We continue to advocate for sanctions as the most effective means for the government to take action against Russia and level the playing field for US producers.”

Neither Russian metal nor the companies that produce it have been targeted by sanctions imposed on some Russian companies in response to Russia sending troops into Ukraine last year.

In 2018, however, US Treasury Department sanctions on Rusal froze the bulk of the company’s exports, paralysed its supply chain and scared off customers.

The sanctions also fueled a jump in aluminum prices on the London Metal Exchange, which on Friday shrugged of news of the tariffs because Russian metal accounts for only a small proportion of US aluminum imports.

Prices of aluminum, vital for transport, packaging and construction industries, were down 2 per cent at US$8,727 a tonne at 1537 GMT. Earlier they touched $2,321.5, the lowest since Jan 9.

US imports of unwrought aluminum and alloys from Russia amounted to 191,809 tonnes, or roughly 4.4 per cent of the more than 4.4 million tonne total last year, compared with 8.9 per cent in 2018 and 14.6 per cent in 2017, according to Trade Data Monitor.

Rusal declined to comment when contacted by Reuters.

Analysts say if Russia decides to retaliate on the 200 per cent tariff on aluminum, it could potentially limit exports of nickel or palladium.

Data Trade Data Monitor (TDM) shows that nearly 11 per cent of the 92,624 tonnes of nickel imported by the United States last year came from Russia and that Russian palladium shipments, at 20 tonnes, accounted for nearly 35 per cent of US imports.

Nickel is vital for the aerospace industry and electric vehicle batteries. Palladium, meanwhile, is a key component for autocatalysts in gasoline-fuelled cars.

Source: Reuters