American trade group the Aluminum Association said in an open letter on Tuesday that the interim final rule to expedite objection-free exclusion requests to the United States’ Section 232 tariffs fails to eliminate concerns regarding transparency, fairness, and efficiency, as well as making no improvement to the exclusion and objection process.
The rule, which changes the exclusion process by expands approval of exclusion requests that are not subject to objection and do not present national security concerns, is problematic for the Association as the exclusions approved to date already allow for volumes of low-cost foreign aluminium that are sufficient to unfairly distort the market, says the letter.
In a letter addressed to Commerce Department Bureau of Industry and Security Regulatory Policy Division Director Hillary Hess, Aluminum Association President and CEO Heidi Brock says exclusions are granted on the wrong criteria.
“Generally it seems the department is not evaluating whether there is actually demand in the market for these large volumes and has granted the requests based simply on the absence of any objections. This is not a valid basis for the department to grant such large requests.”
To date, over 360 exclusions for common aluminium alloy have been approved, with over 300 given to producers from the People’s Republic of China. One exclusion, given to Ta Chen International, permits importation of 890 thousand metric tons of common alloy sheet and plate, almost half of which is sourced from Chinese smelters. The Association points out that the exemptions granted so far already provide for importation of volumes of aluminium that meet a substantial portion of United States aluminium demand.
In addition, the Aluminum Association said that the process suffers from other problems, including a lack of transparency as to the product included in the exclusion, the country of the product’s origin, specifications regarding volumes and alloys, a confusing process for objecting to exemptions, no reporting available to the public regarding pending and granted exclusions, and the absence of a system that detects transshipment.
“The inherent uncertainty of the product exclusion process is actually adding an unnecessarily prolonged cost burden to our members and their customers and chilling investment in the aluminum industry rather than promoting domestic production,” lamented Brock.