The latest agreement between the EU and the US marks a step toward de-escalation in the tariff dispute. However, it does not solve the pressing problem of aluminum scrap exports from Europe.
Even after the agreement, aluminum products will continue to be subject to a significantly higher tariff of 50 percent, while aluminum scrap will be subject to a tariff of only 15 percent. This means that aluminum scrap can be exported to the US on much more attractive terms than primary and semi-finished products, for example.
Rob van Gils, President of Aluminium Deutschland e. V., warns urgently: “The current tariff regulations do not solve our problem, but only exacerbate the imbalance in the aluminum scrap market. The existing arbitrage window thus remains in place and threatens to become entrenched in the long term. This is likely to lead to a permanent increase in scrap exports from Europe – with disastrous consequences for Europe's recycling industry.”
Even before the tariff dispute, the trend in scrap exports from Europe was alarming, especially to Asia. Major consumer markets such as India, Malaysia, and China have also already introduced their own export restrictions on aluminum scrap, further putting European recycling companies at a disadvantage internationally.
EU Commission President Ursula von der Leyen has promised possible tariff reductions and a quota system for steel and aluminum. However, it is currently completely unclear whether, to what extent, and when these measures will actually become reality.
Mr. van Gils continued: “Europe must act decisively and quickly. We now need horizontal export restrictions, erga omnes, on aluminum scrap more urgently than ever. This is the only way to restore balance in the scrap market, secure access to essential domestic raw materials, and strengthen Europe's industrial base in the long term.”
Source: www.aluminiumdeutschland.de
