The US sanctions policy turned out to be a double sided coin. American companies are complaining about emerging problems with supplies from Russia. The rise of the Alumina price is neutralising effects from tariffs for the industry and Moscow warns that retaliatory response is coming soon. What are the impacts and economic costs on the US economy?
Alumina is skyrocketing
Alumina price is up 45 % this year due to U.S. sanctions on Russia’s Company Rusal. It’s an unprecedented price surge on the global markets. Aluminum inventory stocks are down 17% over the past few months on LME (London Metal Exchange) and these are the lowest since 2006.
Impacts of sanctions have shocked the industry – says Jeff Henderson, President of the Aluminum Extruders Council who represents american alumina consumers.
Expensive alumina is no longer fantasy it’s a new reality for car manufactures, construction industry as well as aircraft manufacture industry in the USA
According to Vladimir Rozhankovsky investment analyst at Global FX Expensive Donald Trump has improved business conditions for a few companies like Alcoa aluminum corporation but at the same time made it worse for Ford, GM, GE Johnson Construction., American Construction and others .
Considering other factors such as drop of consumer interest to new cars in the country it all might cause manufacturers to be left with warehouses full of unsold products.
One of the paradoxes of Trump’s protectionist policy is the situation with Whirpool company. In January new tariffs on foreign made washing machines were imposed paving the way for the Whirpool company to raise its washer prices but the Trump’s administration didn’t stop there. They imposed tariffs on steel and aluminum, sending raw material prices skyrocketing.
Another ridiculous example of Trump’s policy was the situation with russian businessmen Victor Vekselberg. Because of the sanctions imposed to his company Renova the toilets at The National Mall and Memorial Parks in Washington administration stopped working. According to The Huffington Post sanctions caused a delay in supply of the sewage pump and other equipment from swiss company Sulzer 63% of which is owned by Renova. As long as Renova cut down its part in Sultzer to 48% to withdraw the company from the US sanctions the equipment was supplied at the same day. The employes of the National Alley however had to use temporary toilet for a while.
Aluminum crisis is not the only example of how anti – Russian sanctions negatively affect american business. The Exxon Company had to leave joint projects with russian companies with total loss of 200 million dollars.
Alexis Rodzianko the president of American Chamber of Commerce in Russia says that new sanctions against Russia do more harm to american economy than to Oleg Deripaska.
Natalia Veselnitskaya – official website