US waives tariffs for Bahrain-based company

A BAHRAIN-BASED company has been exempted from paying US tariffs on some of its products and alloys being imported into America.

Gulf Aluminium Rolling Mill Company (Garmco) is the first firm in the country that can now export aluminium without paying the levy that was announced by US President Donald Trump in March.

A 25 per cent tariff on steel imports and 10pc tariff on aluminium imports was imposed to counter what President Trump described as unfair international competition.

Canada and Mexico were initially granted exemptions from the new levy but that was lifted in June, while Bahrain was not exempt, despite signing a free trade agreement (FTA) with the US.

“The tariffs were levied by the Trump administration under special classification which was to protect its national security interests,” Garmco chairman Bassem Al Saie told the GDN.

“This superseded everything and did not exempt countries that had FTAs with the US.

“Our Garmco US team proactively engaged with US officials and applied for an exemption on certain products and alloys that are exported to the US.”

With an annual production capacity of 165,000 tonnes, Garmco specialises in producing high-quality flat-rolled aluminium products in various sizes and alloys, including sheets and coil, that is supplied to over 2,000 customers in more than 45 countries.

Mr Al Saie said Garmco was informed last week by the US Department of Commerce that it had been exempted from the levy.

“There is right now a huge shortage of our products (in the US) as the Chinese have been locked out because of the tariffs.

“This means there is an additional incentive for Garmco to play a key role.”

The US has levied additional duties of between 10pc and 25pc on $250 billion of Chinese goods this year for what it calls the country’s unfair trade practices, with the 10pc tariffs set to rise to 25pc from January next year.

Alba, Bahrain’s top exporter to the US, is the country’s most obvious victim of the new tariffs.

The smelter accounted for 61pc of total Bahraini exports to the US last year.

Alba chief executive Tim Murray said in April they were working to get an exemption, adding that the levy would ultimately be passed to consumers in the US Midwest.

Bahrain had hired Washington-based law firm Miller and Chevalier to provide legal assistance in challenging the tariffs.

However, documents on the US Department of Justice website revealed the contract ended on March 31.

Bahrain’s Ambassador to the US Shaikh Abdulla bin Rashid Al Khalifa said the matter was being followed up with the US authorities.

“The tariff situation is still being studied by the US government,” he told the GDN.

“We think it is going to be a holistic approach. So I don’t see a solution only for Bahrain, but it will be GCC-wide.

“Bahrain and US relations are the best we have seen in a very long time.

“You can see that in many of the actions from the security perspective – the sanctions on terrorist organisations, our defence agreements – and the ongoing success of the FTA.”

American Chamber of Commerce (AmCham) Bahrain president Qays Zu’bi said the tariff issued had been raised with the US Embassy in Bahrain, and efforts are underway to persuade a change in US policy.

“We hope one way or another progress is made,” he said.

Bilateral trade between the US and Bahrain has risen from $782 million in 2005 to $1.9bn last year.

In the first seven months of this year, two-way trade increased by 54pc to $1.678bn from $1.085bn during the same period in 2017.

Last year, the top commodities the US exported to Bahrain under the FTA included machinery, appliances, vehicles, sound and television equipment, and optical and medical instruments, among others.

In the same period, the top commodities that Bahrain exported to the US included aluminium, oil, textiles, iron and steel, and plastics.

Source: http://www.gdnonline.com/Details/430087