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Japan aluminium industry fears U.S. trade action could lead to retaliation

The Japanese aluminum industry is concerned that any trading action in the U.S. aimed at blocking the import of the metal, may lead to excess demand in another location, and to cause a chain reaction of retaliation on the part of other countries.

26.Jul.17 3:11 PM
By Daria Zaytseva


Japan aluminium industry fears U.S. trade action could lead to retaliation

Trump's administration is determined to curb imports of aluminium and steel, using the law of 1962, which allows setting tariffs or quotas on imports, if national security is threatened.

The results of the review are still under consideration, but the move has been widely criticized by diplomats, who say that it runs the risk of retaliation and could undermine global trade, if the national security will become a recognized excuse for violating the rules of international trade.

"Direct impact to Japan may be limited given the small portion of its exports that go to the U.S. market, but a possible battle among many other nations to exclude imports would be the biggest threat to free trade," Mitsuru Okada, the new chairman of the Japan Aluminium Association told a small group of reporters.

Japan, which produces about 2 million tonnes of rolled and extruded aluminium products a year, exported nearly 250,000 tonnes of those products in 2016.

About 10% of the exported material went to the U.S., according to the nation's trade data.

Okada also expressed concern about the excessive aluminum capacity in top producer China, indicating the growing demand for bullion local aluminum producers, which are rapidly expanding production capacity.

This year, aluminum prices rose more than 10%, partly due to the reduction of capacity in China. Benchmark rates were approximately $1,943 per ton on Wednesday.

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