Mayor of Kitimat ‘disappointed’ by aluminum tariff announcement

KITIMAT (NEWS 1130) – Not surprised, but disappointed.

That’s how the mayor Kitimat is responding following news Canadian aluminum will now be subject to a new tariff in the US.

Phil Germuth’s northwestern BC city has been built on the fortunes of the aluminum industry.

Rio Tinto Alcan began operations in Kitimat more than 60 years ago and to this day employs 1,000 people.

The population of Kitimat is only 8,000.

“There’s no doubt that over the 60 years that the aluminum business has been here, it has been a huge economic driver, not just for Kitimat, but for the region and the province of course,” says Germuth.

And Kitimat is poised to be hit particularly hard by the tariff.

“Seventy-five per cent of the aluminum from their Canadian smelters does go to the US. And even a higher percentage of aluminum made in Kitimat goes to the US. There are potential impacts there,” says Germuth.

He says it’s a little too early to say what that impact could be. As soon as news of the tariff broke, he says was on the phone with a general manager of Rio Tinto, asking if the city could help in any way. He learned that the company is now assessing the impact on local operations and working with its customers.

The company has made substantial investments to keep the local operations competitive for decades to come.

“We are hoping it doesn’t affect us but it doesn’t mean it can’t. The company spent $5 billion on upgrading the smelter. They are spending half a billion dollars on the T2 project at the Kemano. So they have invested a lot of money into this operation,” says Germuth.

The T2 project is a second tunnel drawing water from the Nechako Watershed to the Kemano Powerhouse, which supplies power to the smelter.

“All other resource industries can be cyclical. They can go up and down. But the aluminum industry has been going 24 hours a day, seven days a week, 365 days a year for over 60 years. It’s not the type of industry you can shut down,” notes Germuth.

Canada, Mexico and Europe had been exempted from import duties of 25 per cent on steel and 10 per cent on aluminum when they were first imposed in March, but those exemptions will expire as scheduled on Friday.

Commerce Secretary Wilbur Ross confirmed Thursday that the United States would end the temporary exemption on Canadian, Mexican and European Union steel and aluminum as of midnight, as scheduled.

Trudeau is calling the tariffs “totally unacceptable,” suggested they would alter the relationship between the two countries, and has announced plans to levy tariffs on 12.8-billion dollars in American products.

The tariffs, which apply to a long list of U.S. products that includes everything from flat-rolled steel to playing cards and felt-tipped pens, will go into effect July 1, said Foreign Affairs Minister Chrystia Freeland.

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