Aluminium Association highlights importance of Section 232 tariff exemption one year on
In a letter to US trade representative Robert Lighthizer marking the one-year anniversary of the removal of Section 232 aluminium tariffs on aluminium produced in North America, Aluminium Association president & CEO Tom Dobbins noted the continued importance of the exemptions to US aluminium companies and workers.
“The US aluminium industry depends on a reliable source of Canadian primary aluminium, which has been a key part of the domestic supply chain and national security apparatus for decades, to meet demand for these aluminium products,” Dobbins said.
“Even if every US aluminium smelter was operating at full capacity, aluminium manufacturers would still require a mix of domestic and imported primary aluminium as well as secondary production to meet the demands of US manufacturers and consumers for aluminium products. Fully 97% of US aluminium industry jobs are in mid-and-downstream production and processing, and these jobs – as well as many more at US aerospace, automotive, and other advanced manufacturing firms – depend on reliable aluminium supplies from our USMCA trading partner.”
Levels of imported primary aluminium from Canada into the US 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 aluminium shipped may vary according to market conditions, total imports of primary material over time have stayed relatively constant”, Dobbins noted.
Dobbins also highlighted continued issues in the implementation of the Section 232 programme, particularly the aluminium product exclusion process. Since the beginning of the programme, the Commerce Department has granted tariff exclusions on aluminium products covering more than 22 billion pounds of aluminium – 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 aluminium products from China, overall imports of semi-fabricated aluminium products into the United States increased by nearly 4% in 2019. Much of this aluminium was excluded by the Commerce Department from the Section 232 tariffs,” said Dobbins.
“Meanwhile, domestic production of semi-fabricated aluminium products declined more than 3% in 2019.”
Dobbins called for increased import monitoring in North America to combat unfair global trade practices, especially subsidised aluminium overcapacity originating in China. He applauded efforts by the US and Canadian governments to develop and expand import monitoring systems to include aluminium and aluminium products. He noted that Mexico has not implemented any similar programmes.
“I urge you to work with your counterparts in Mexico to ensure its government is adequately monitoring imports of aluminium products – particularly from non-market economies like China,” Dobbins said.
“We stand ready to support the establishment of a North American Aluminium Trade Committee to discuss – and address – trade flow shifts and patterns.”