U.S. Department of Commerce Secretary Wilbur Ross released the department’s report on steel and aluminium imports investigated during the recent Section 232 national security investigation yesterday, in which the Department recommends a mix of tariffs and quotas on aluminium products entering from abroad, including from the People’s Republic of China.
The reports, which were delivered to President Trump’s desk about a month ago, describe the Department’s findings that aluminium and steel imports “threaten to impair the national security” of the United States.
On the subject of aluminium imports, the investigation uncovered several key findings:
- Imports of aluminium have risen significantly in just the last several years – jumping from 66 percent of the country’s overall aluminium demand to 90 percent today.
- As imports rose, the domestic aluminium industry has contracted. Between 2013 and 2016 employment in the sector dropped by 58 percent and 6 smelters closed their doors. At present, and despite a rise in aluminium demand, just 2 of the 5 smelters still open run at full capacity.
- Specialty aluminium has taken a significant blow as well, with only a single producer still in business.
- As has been extensively detailed in these pages, Commerce pointed out the numerous cases lodged against China over the dumping of aluminium. Six such actions are in place at the present time – 2 antidumping and countervailing duty orders and 4 dumping investigations.
While little of this came as news to aluminium watchers, the Department’s recommendations for addressing the situation are the subject of significant interest. In addition to measures already in place, investigators suggested three remedies to the current situation:
- An across-the-board tariff of 7.7 percent or more on the entirety of aluminium products from all sources,
- Assessing a tariff of 23.6 percent on exports from China, Hong Kong, Russia, Venezuela, and Vietnam, and instituting a freeze in imports at last year’s levels, or
- An across-the-board quota of 86.7 percent of each country’s 2017 total exports.
Stakeholders in the United States’ aluminium sector were quick to chime in on the findings. Heidi Brock, President & CEO of the Aluminum Association said her organization prefers a more nuanced approach, engaging China in a firm but amicable manner.
“We look forward to working with the president on a final decision that helps support continued growth in the U.S. aluminum industry. Ultimately, we favor a negotiated, enforceable government-to-government agreement with China on overcapacity.”
Century Aluminum’s President and Chief Executive Officer Michael Bless lauded the Commerce Department’s report as proof positive that the Trump Administration has a firm grasp of the issues facing the aluminium sector.
“We strongly support today’s release by the Department of Commerce of the Section 232 Aluminum Report. The report demonstrates this administration’s clear recognition that swift action is required to stop the surge of aluminum imports from destroying our industry. Aluminum is vital to our national security. Today we face a flood of imports—and that will only accelerate without immediate relief. We call on President Trump to act swiftly and boldly to save the American aluminum industry. We look forward to working with the administration to address this crisis.”
President Trump has until mid-April to act on the Commerce Department’s recommendations. Though he has consulted with lawmakers on the subject, Trump has yet to release specifics regarding what the government’s response will be.