Commerce Starts Aluminum Import Investigation
The Commerce Department on April 26 started an investigation into aluminum imports that could give President Donald Trump broad authority to level tariffs or quotas if it finds that the imports endanger national security, Commerce Secretary Wilbur Ross said during an April 26 briefing. “It is an investigation,” Ross said. “It is not one that has come to a conclusion. Therefore, we are not levying countervailing duties or taking any other action. This simply is starting the process and trying to accelerate it.” While aluminum imports “have been flooding” the U.S., the investigation lead to a decision on whether to respond with a trade remedy or some alternative, Ross said. Asked about the possibility of World Trade Organization actions taken in connection with the U.S. investigation, Ross said the administration will act “based on our view as to what are the proper rules, and our view as to who’s violating those rules. The WTO will do what they do.”
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Imports occupied 55 percent of the U.S. aluminum market in 2016, about a 40 percent increase from 2012, and imports of semi-fabricated aluminum from China grew by 183 percent from 2012 to 2015, Ross said. Chinese subsidies have created a global aluminum overcapacity, keeping prices low, he added. Meanwhile, the U.S. accounts for only 1.4 percent of overall world aluminum production, he said. But the Section 232 investigation isn’t “China-phobic,” Ross qualified, noting that the underlying problem for the influx of imports to the U.S. is global overcapacity. High-purity aluminum is needed for the F-35, F-18 and C-17 military aircraft, as well as for armor plating of military and combat vehicles, and only one U.S. aluminum smelter produces the grade of metal necessary for these uses, he said.
Trump signed an executive order on April 27 outlining the specifics of the investigation. Section 232 investigations require the commerce secretary to submit the findings of an investigation to the president within 270 days after they start, though the results could come sooner. The aluminum investigation follows another Section 232 investigation on steel imports that Commerce launched April 19 (see 1704200029). The investigation is now the 28th since the authority was created by Congress in 1962, but only a few resulted in import restraints.
The Aluminum Association met news of the aluminum investigation favorably, saying (here) the action is geared toward addressing unfair trade practices hurting U.S. aluminum producers and fabricators. United Steelworkers (USW), on the other hand, cautioned that the investigation should exclude Canadian aluminum imports, which compose 60 percent of the U.S. aluminum import market but substantially contribute to the U.S. construction industry, according to a statement (here). USW International President Leo Gerard said he will make a formal submission to the administration urging a focus on China as the main problem behind the glut of U.S. aluminum imports, not Canada, which he said follows trade rules. “Our goal should be fair trade, not just walling off the U.S. market,” said Gerard, whose organization represents steelworkers in the U.S. and Canada. “That’s what the Steelworkers have fought for, for years.” USW Canadian Director Ken Neumann said the aluminum and steel investigations shouldn’t “miss their real targets.” Neumann also called for the government of Canada to respond to news of the investigation, to defend the country’s aluminum sector. The Canadian Embassy in Washington didn’t immediately comment.
Sen. Sherrod Brown, D-Ohio, praised the news of the administration’s investigation but said it should lead to relief for the aluminum supply chain. “It’s good news the Administration is using this tool, but what matters to Ohio workers and the aluminum supply chain is whether it leads to real relief and action against China’s market-distorting policies,” Brown said in a statement (here).