Aluminum Association Calls for Changes to Section 232 Tariffs, Other Trade Policy
Urgent Reforms of 232 Exclusion Process, Strong Trade Enforcement and Multilateral Action Needed
The Aluminum Association, representing companies that make 70 percent of the aluminum and aluminum products shipped in North America, today released a new policy brief -- “A Trade Policy Framework for the U.S. Aluminum Industry.” The document highlights key priorities to ensure that U.S. aluminum can compete on a fair and level global playing field.
The U.S. aluminum industry supports nearly 660,000 total jobs (166,000 direct) and nearly $172 billion in total economic output ($70 billion direct). Aluminum is a key element of any comprehensive strategy to enhance the nation’s infrastructure while conserving energy, improving environmental quality and mitigating climate change. Aluminum is a key component in making vehicles more efficient, buildings greener and packaging more recyclable. The federal government has also recognized strong domestic aluminum supply chains as “vital to national security, especially in an unexpected or extended conflict or national emergency.”
“Three years after the implementation of the Section 232 tariffs on most aluminum imports into the U.S., it is time to take a fresh look at trade policy to support a robust domestic aluminum industry,” said Tom Dobbins, president & CEO of the Aluminum Association. “The Biden administration and the new Congress have an opportunity to harness the growth potential for aluminum as a sustainable solution for the 21st century, and capitalize on the more than $3 billion of private U.S. aluminum investment over the past decade. The federal government can take action immediately to put American aluminum on an equal footing with overseas competitors.”
Among other recommendations in the document, the Aluminum Association urges the Biden administration to:
- Implement immediate and urgent reforms to Section 232 exclusion process: The current Section 232 product exclusion process has inadvertently made the United States a magnet for imports. The current Section 232 exclusion process actively incentivizes companies to turn first to import aluminum products like sheet, plate and foil that are manufactured in abundance in the United States. To cite just one example, the Commerce Department granted 8.3 billion pounds of aluminum can sheet exclusions (including massive volumes for Chinese product) in 2020 alone – more than twice the size of the entire annual U.S. market. If importers were to fully utilize the exclusions already granted by the Commerce Department, those customers would not need to purchase one pound of American-made aluminum can sheet for the next two years.
- Carefully consider country-wide exemptions to the Section 232 aluminum tariffs on countries committed to market-based trade: The Aluminum Association has long favored a targeted, durable approach to trade remedies and strong enforcement of the trade rules. The U.S. Trade Representative should consider negotiating the removal of Section 232 aluminum tariffs with countries that trade fairly and have taken action to address unfairly subsidized imports that destabilize their domestic markets. Any exemptions should be implemented in a thoughtful way, as part of a comprehensive policy approach that supports the U.S. aluminum value chain, to allow market conditions to normalize.
- Continue robust trade enforcement and maintain Section 301 tariffs on aluminum imports: The government should continue to use all the tools at its disposal to fully enforce existing trade rules, including anti-dumping and countervailing duty (AD/CVD) orders. AD/CVD orders have been successfully deployed in the aluminum foil and common alloy sheet markets as a backstop to unfairly traded imports. The administration should maintain Section 301 tariffs on imports of aluminum from China – and ramp up evasion and circumvention efforts – until harmful structural subsidies that drive overcapacity are addressed. As noted in the recently released Office of the U.S. Trade Representative 2021 National Trade Estimate Report on Foreign Trade Barriers, “China’s capacity and production continue to contribute to major imbalances and price distortions in global markets, harming U.S. aluminum producers and workers.”
- Prioritize multilateral efforts to combat unfair global trade practices and harmful industrial subsidies: The Biden administration has an opportunity to lead a coalition of nations committed to a rules- and market-based global trading system against unfair industrial practices in China. Overcapacity in the global aluminum market remains a major challenge. Aluminum smelter output in China hit records last summer, and Chinese producers are slated to bring online 3 million metric tons of new primary aluminum capacity this year. Meanwhile, China’s exports of semi-fabricated aluminum products are gaining market share around the world. In a recent letter to U.S. Trade Representative Katherine Tai, the Aluminum Association urged the Biden administration to work with allies on these issues, consistent with a recent commitment by G7 trade leaders to collectively address “harmful industrial subsidies, including those causing excess capacity.”
- Launch the new Aluminum Import Monitoring system and carefully track aluminum trade flows: The Commerce Department has delayed the launch the Aluminum Import Monitoring (AIM) system, a program that was funded with bipartisan support for Fiscal Year 2021, until June 28. It is imperative that the system is launched expeditiously and in consultation with the full value chain of the aluminum industry. The AIM will serve as an early warning mechanism to help spot trends and shifts in trade flows that might warrant industry or government action. As new license and trade data is available in the aluminum monitor, the Commerce Department should work closely with the association and member companies to analyze those trends and assess policy options to address emerging issues.
- Outline a comprehensive policy, with long-term federal investment, to ensure a stable and resilient domestic aluminum capacity amidst a global supply chain: It is in the economic and national security interest of the United States to have a resilient and self-sufficient domestic aluminum supply chain. The federal government can play a leading role by investing to modernize both U.S. aluminum primary smelting and secondary recycling operations.
The Aluminum Association is committed to working with the new administration and Congress on programs, policy changes and smart investments to grow aluminum as an essential element of American manufacturing. Over the past 40 years, the aluminum industry in North America has cut the intensity of greenhouse gas emissions from primary production by more than half while doubling the amount of aluminum collected for recycling.
To learn more visit www.aluminum.org/agenda.
Media Contact
Matt Meenan
mmeenan@aluminum.org
703-358-2977