Gov't sees no threat from US tariffs

Saturday, March 17, 2018

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MINISTER of Foreign Affairs and Foreign Trade Senator Kamina Johnson Smith says that Jamaica does not currently produce or export steel nor aluminium and therefore would not be directly affected by new US tariffs on imports of these products.

However, she said, while speaking in the Senate yesterday, that “it is within the realm of contemplation” that the tariffs on aluminium exports from various countries could potentially have an impact on Jamaica's export of alumina to those countries.

“We have concluded, however, that any impact would be limited, as the greater portion of aluminium exports from these countries go to markets other than the United States,” she noted.

The senator made the pronouncements on the heels of concerns raised by Opposition spokesperson on foreign affairs and foreign trade, Lisa Hanna, earlier this week that the proposed tariffs could have serious direct and indirect economic implications for Jamaica.

Senator Johnson Smith pointed out yesterday that 30 per cent of Jamaica's alumina is exported to The Netherlands, which processes it into aluminium.

“But we are aware that only 1.7 per cent of Dutch aluminium exports go to the United States. Similarly, while 10 per cent of our alumina is exported to Iceland, less than one per cent of Iceland's aluminium exports go to the US,” she pointed out.

Senator Johnson Smith said that these findings, coupled with the fact that 19 per cent of Jamaica's alumina is exported to Canada, which is exempt from the new tariff, and nine per cent goes to the USA, suggest that the level of exposure of local alumina exports to the indirect impact of the new measures is limited.

In the case of bauxite, she noted that 78 per cent of local exports go directly to the USA and, therefore, there was not any indication of immediate negative impact.

“We are, however, quite aware that we are at the early stages of this matter, and will therefore continue to monitor the trade reports relating to both aluminium and aluminium products. We will also consult closely with our partners as we continue to assess developments and consider any measures that might be deemed necessary to secure our vital bauxite and alumina exports,” she stated.

She said, too, that, beyond the issue of the impact of the measures on local exports, there is interest in the possible effects on consumer prices as they take effect.

“In this regard it is important to note that the United States is not a major supplier of steel to Jamaica. Furthermore, it is not yet clear what the effects of the measures would be in markets for steel and aluminium, and steel and aluminium products, beyond the United States. We are mindful that there could be medium-to long-term effects on consumer prices, but these are not imminent and will be determined by market forces,” Senator Johnson Smith stated.

She said that, with respect to concerns regarding the impact of the measures on recent significant investments in Jamaica's bauxite and alumina industry, and prospects for the introduction of aluminium smelting in the future, there is every indication that these investments remain very much on track.

US President Donald Trump said on March 1 that he had decided to impose punishing tariffs on imported steel and aluminium in a major escalation of his trade offensive. Trump said he had decided on tariffs of 25 per cent for foreign-made steel and 10 per cent for aluminium.

Trump acted following a Commerce Department decision earlier this month that rising import volumes threatened US national security.

— Balford Henry

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