Bolstering the case made by a recent report issued by the Organization for Economic Cooperation and Development (OECD), a white paper released on Tuesday by the American Primary Aluminum Association (APAA) argues that state subsidies of domestic aluminium production is widespread and pervasive, and the subsidies are having a harmful effect on producers in market-based economies like the United States.
Speaking on the report, APAA Counsel Robert DeFrancesco elaborated upon the deleterious effects of such practices.
“The OECD’s report confirms that widespread subsidization across multiple countries is creating a race-to-the bottom whereby governments who provide subsidies maintain and expand capacity and countries where subsidies are not provided like the U.S., see capacity shrink. The report found that from 2013-2017, significant subsidies were provided by China, India, the Gulf Cooperation Council (GCC) countries, Norway, Australia, and Canada. It is no coincidence that the aluminum industries in each of these countries were able to expand their capacity despite an ongoing collapse in the global aluminum price. Further, the subsidies themselves distort market dynamics and create a misperception that these regions are inherently more cost-competitive than other non-subsidized regions; without the subsidies producers in those regions would not be able to maintain and expand capacity.”
APAA CEO Mark Duffy echoed the statements made in the report, opining that the Trump administration’s tariffs act as a counterweight to such unfair subsidies.
“The OECD’s recent report underscores assertions that the APAA has been making for months – that illegally subsidized primary aluminum has crippled the U.S. primary aluminum industry. The cheating and illegal subsidization, carried out by countries like China, India, the GCC, and others, have created an uneven playing field for American primary aluminum producers. The Section 232 aluminum tariffs help level the playing field for American workers and restore an industry decimated by unfair foreign competition.”
Per APAA’s report, the Trump administration’s Section 232 import duties should be broadly applied, exempting no source of overseas aluminium.