One Year Later, Section 232 Tariff Exemption Still Vital to U.S. Aluminum Industry | The Aluminum Association

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One Year Later, Section 232 Tariff Exemption Still Vital to U.S. Aluminum Industry

May 20, 2020

In a letter to U.S. Trade Representative Robert Lighthizer marking the one-year anniversary of the removal of Section 232 aluminum tariffs on aluminum produced in North America, Aluminum Association president & CEO Tom Dobbins noted the continued importance of the exemptions to U.S. aluminum companies and workers.

“The U.S. aluminum industry depends on a reliable source of Canadian primary aluminum, which has been a key part of the domestic supply chain and national security apparatus for decades, to meet demand for these aluminum products,” Dobbins said. “Even if every U.S. aluminum smelter was operating at full capacity, aluminum manufacturers would still require a mix of domestic and imported primary aluminum as well as secondary production to meet the demands of U.S. manufacturers and consumers for aluminum products. Fully 97 percent of U.S. aluminum industry jobs are in mid-and-downstream production and processing, and these jobs – as well as many more at U.S. aerospace, automotive, and other advanced manufacturing firms – depend on reliable aluminum supplies from our USMCA trading partner.”

Levels of imported primary aluminum from Canada into the U.S. are generally consistent with volumes dating back prior to the imposition of the Section 232 tariffs and are down from peaks in 2017. While “the precise mix of the types of primary aluminum shipped may vary according to market conditions, total imports of primary material over time have stayed relatively constant” Dobbins noted. 

Average P1020
7601.10
(t/month)
VAP
7601.20
(t/month)
Unwrought
7601
(t/month)
2015 - 2017 109 813 85 112 194 925
2017 128 965 80 623 209 587

2019

100 980 73 460 174 440
2019 (Q3-Q4) 136 460 68 178 204 638
2020 (YTD) 125 261 61 108 186 369

(Source: Aluminium Association of Canada)

Dobbins also highlighted continued issues in the implementation of the Section 232 program, particularly the aluminum product exclusion process. Since the beginning of the program, the Commerce Department has granted tariff exclusions on aluminum products covering more than 22 billion pounds of aluminum – including more than 4 billion pounds from China, the most granted for any single country. 

“Even as successful antidumping and countervailing duty cases led to a sharp decline in unfairly traded imports of flat-rolled aluminum products from China, overall imports of semi-fabricated aluminum products into the United States increased by nearly 4 percent in 2019. Much of this aluminum was excluded by the Commerce Department from the Section 232 tariffs,” he said. “Meanwhile, domestic production of semi-fabricated aluminum products declined more than 3 percent in 2019.” 

Dobbins called for increased import monitoring in North America to combat unfair global trade practices, especially subsidized aluminum overcapacity originating in China. He applauded efforts by the U.S. and Canadian governments to develop and expand import monitoring systems to include aluminum and aluminum products. He noted that Mexico has not implemented any similar programs.

“I urge you to work with your counterparts in Mexico to ensure its government is adequately monitoring imports of aluminum products – particularly from non-market economies like China,” Dobbins said. “We stand ready to support the establishment of a North American Aluminum Trade Committee to discuss – and address – trade flow shifts and patterns.”

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About The Aluminum Association
The Aluminum Association represents aluminum production and jobs in the United States, ranging from primary production to value added products to recycling, as well as suppliers to the industry. The Association is the industry’s leading voice, providing global standards, business intelligence, sustainability research and industry expertise to member companies, policymakers and the general public. The aluminum industry helps manufacturers produce sustainable and innovative products, including more fuel-efficient vehicles, recyclable packaging, greener buildings and modern electronics.  In the U.S., the aluminum industry supports $174 billion in economic activity and nearly 700,000 jobs. For more information visit https://www.aluminum.org, on Twitter @AluminumNews or at Facebook.com/AluminumAssociation.

 

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