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Jamaica Not Directly Impacted By US Tariffs on Aluminium and Steel

By: , March 17, 2018

The Key Point:

Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson Smith, says Jamaica does not currently produce or export either aluminium or steel and would, therefore, not be directly impacted by the new United States (US) tariffs on imports of these products.

The Facts

  • “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 explained.
  • Bauxite and alumina are not subject to the tariffs that have been imposed and are actually tariff-exempt under the provisions of the Caribbean Basin Initiative (CBI), which governs Jamaica’s trade with the US.

The Full Story

Minister of Foreign Affairs and Foreign Trade, Senator the Hon. Kamina Johnson Smith, says Jamaica does not currently produce or export either aluminium or steel and would, therefore, not be directly impacted by the new United States (US) tariffs on imports of these products.

Delivering a Statement in the Senate on Friday (March 16), at Gordon House, Senator Johnson Smith, noted that the tariffs to be faced by aluminium exports of various countries could potentially have an impact on Jamaica’s exports 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 explained.

“As an illustration, 30 per cent of our 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,” Senator Johnson Smith added.

The Minister said these findings, coupled with the facts 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 US, suggest that the level of exposure of our alumina exports to the indirect impact of the new measures is limited.

In the case of bauxite, the Minister said 78 per cent of Jamaica’s exports go directly to the USA and, therefore, “we do not foresee any 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 said.

The US Administration has imposed tariffs of 10 per cent and 25 per cent on aluminium and steel respectively, citing national security grounds. The tariffs are to take effect on March 23.

Meanwhile, Senator Johnson Smith said currently there is interest in the possible effects on consumer prices as the tariffs take effect, noting 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,” she noted.

With respect to concerns expressed regarding the impact of these measures on recent significant investments in the country’s bauxite and alumina industry and prospects for the introduction of aluminium smelting in the future, Mrs. Johnson Smith said “there is every indication that these investments remain very much on track”.

“Beyond these market-related issues, we are paying careful attention to statements from some of the United States’ key trading partners, which allude to the possibility of robust responsive measures,” she added.

Bauxite and alumina are not subject to the tariffs that have been imposed and are actually tariff-exempt under the provisions of the Caribbean Basin Initiative (CBI), which governs Jamaica’s trade with the US.

Last Updated: February 15, 2019

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