The Aluminum Extruders Council yesterday called upon the Trump Administration to end Section 232 tariffs on imported aluminium, noting the damage the penalties they say were misapplied has done to the domestic aluminium industry.
The AEC began by citing its optimism in the new tariffs. However, after over four dozen aluminium industry executives testified to administrators that the culprit in the damage to their industry was the People’s Republic of China, the Trump administration levied the tariffs equally across the board, which they say put them in an even worse situation than before.
Thanks to the imminent closure of Alcoa’s Ferndale plant that was announced last week, the Council notes that the industry was left barren of primary billet, forcing those buyers to look overseas for product. They note that there is no longer an incentive to replace the plant with Section 232 tariffs or without them.
“As long as China is allowed to build capacity and spew its metal to the world in the form of semi-fabricated and fabricated products, they will be the beneficiaries of a dynamic and growing aluminum industry – not U.S. producers as a whole. It’s easier for China to do this because they have decided to subsidize downstream development of aluminum products with heavily subsidized Chinese ingot. China recognizes that employment, growth, and product development come in the downstream markets, not at the raw material level. Left unabated, the Chinese aluminum industry will ultimately enjoy the benefits of cornering the market and product development of tomorrow’s better ideas, which will help them grow their manufacturing base in a variety of applications. You can kiss American innovation and ‘Made in the U.S.A.’ goodbye.”
The Council goes on to say that the tariffs and loss of affordable aluminium billet was a double whammy, as many extruders earned money on both the extrusion of aluminium but also fabrication. They say their case to the administration avoided this by being targeted only to Chinese importers, not the entire overseas market as a whole.
“The truth is that extruders are seeing business go the other direction. Due to the 232 tariff on primary aluminum, U.S. extruders pay more for their aluminum than any country in the world. So, while China subsidizes aluminum prices to fabricators, our country is doing the exact opposite. The 232 tariff order has put a target on our backs. Furthermore, to avoid the 232 tariffs on extrusions, foreign extruders are simply adding value to the product and plundering our customers. Even worse, U.S. extruders trying to retain that business see a wider price gap versus low-cost countries when more value is added to the part. So, those low-cost countries have us right where they want us. There isn’t a week that has gone by since the third quarter of 2019 that we haven’t heard of an extruder losing business or price to a low-cost country, and that was before the coronavirus pandemic. Now that our nation, and the world, finds itself digging out of the economic tragedy from Covid-19, every order is precious. That next order may determine whether a facility has another round of layoffs.”
The Council closed by expressing its confidence in the American extrusion industry and its ability to compete in a fair market. However they said they were “bitterly disappointed” by the measures taken by its own government.