Montreal (Reuters) -Canada has discussed offering financial support to large aluminum producers such as Rio Tinto affected by a trade war led by the US, in the event that the 50% rate of Washington on the import of the metal in the medium term persists, the CEO of an important trade group in the industry said.
Aluminum Association of Canada CEO Jean Simard told Reuters in an interview that the early conversations could help the sector in the event that Ottawa is unable to reach a planned deal with his most important trading partner by July 21.
While the most important aluminum producers who are active in Canada do not have liquidity problems, SIMARD said, a 50% US rate on aluminum import would inevitably have an impact on finances if it continues.
“It is part of a larger discussion where everything is on the table,” Simard said, adding that no decision was made. “With the rate of 50% since 4 June, it is normal that there are discussions about the impact on the liquidity of companies if the situation persists over time.”
About half of all aluminum used in the US is imported, with the vast majority from Canada, which exported 3.2 million tonnes of metal to the United States last year.
Simard's comments follow media reports at the end of Friday in which Minister of Federal Industry Mélanie Joly said that the government has discussions with Rio Tinto about providing financial aid because of the crushing American rates. Joly is said to have mentioned the conversations during a meeting on Thursday with business leaders in the Saguenay region of Quebec, an important hub for aluminum production, also known as the aluminum valley in Canada.
Rio Tinto refused comments on Saturday. A Joly spokesperson was not immediately available for comment.
US President Donald Trump doubled the rates for steel and aluminum input to 50% last month, which increased the pressure on global steel producers and his trade war, to support the domestic production of vital materials for construction.
(Reporting by Allison Lampert in Montreal, editing by Nick Zieminski)
