EU-US tariff agreement “fails to resolve scrap problem”

Despite the agreement in the EU-US tariff conflict, the problem of aluminium scrap outflow from Europe remains unresolved – and threatens to worsen, Aluminium Deutschland has shared in a statement. Europe’s recycling industry warns of a permanent loss of raw materials and calls for immediate export restrictions.

The recent agreement between the EU and the US marks a step towards de-escalating the tariff conflict. However, it does not solve the pressing problem of aluminium scrap outflow from Europe. Even after the agreement, aluminium products will continue to be subject to a significantly increased tariff rate of 50%, while aluminium scrap is subject to a tariff rate of only 15%. This means that aluminum scrap can be exported to the US at significantly more attractive conditions than primary and semi-finished products.

Rob van Gils, president of Aluminium Deutschland, commented: “The current tariff regulations do not solve our problem, but only further exacerbate the imbalance in the aluminium scrap market. The existing arbitrage window thus remains and threatens to become entrenched in the long term. This makes a permanently increased outflow of scrap from Europe likely – with catastrophic consequences for Europe’s recycling industry.”

Even before the tariff conflict, the trend in scrap exports from Europe was alarming, particularly to Asia. Major consumer markets such as India, Malaysia, and China have already introduced their own export restrictions on aluminum scrap, which is causing European recycling companies to fall further behind internationally.

EU Commission president, Ursula von der Leyen, has held out the prospect of possible tariff reductions and a quota system for steel and aluminium. However, to what extent, and when these measures will actually become reality, remains completely open at this point.

Van Gils concluded: “Europe must now act decisively and swiftly. We now need horizontal export restrictions, erga omnes, on aluminium scrap more urgently than ever. Only in this way can we restore balance in the scrap market, secure access to essential domestic raw materials, and strengthen Europe’s industrial base in the long term.”