USW Urges CFIUS to Reject Zhongwang Purchase of Aleris
20 September 2016 by Staff
United Steelworkers president Leo W. Gerard sent an open letter to U.S. Secretary of the Treasury Jack Lew on Thursday urging the Committee on Foreign Investment in the United States (CFIUS) to recommend against the purchase of Aleris Corporation by China Zhongwang.
Though rumors regarding the firm’s alleged involvement in the fake aluminium semis have swirled around Zhongwang and its chairman Liu Zhongtian, the firm and its chairman have come under intense scrutiny after a recent article in the Wall Street Journal brought the story to a wider audience.
“The Zhongwang Group’s chairman, Mr. Zhongtian Liu, is a member of the Chinese Commiunist Party and has been recognized for his work on behalf of the government and the party,” wrote Gerard in the open letter. “In the face of numerous trade complaints before the U.S. Government relating to investigations and administrative reviews of antidumping and countervailing duty orders on extruded aluminum products, the company refused to participate in these official proceedings. Further, there have been numerous allegations of a pattern of evasion and circumvention of U.S. laws as recently noted in an article in the Wall Street Journal Chinese Billionaire Linked to Giant Aluminum Stockpile in Mexican Desert. According to allegations and the news account, the ‘Chinese metals conglomerate China Zhongwang, used a factory in Mexico to game the global trade system.’”
Gerard went on to say that the CFIUS had an obligation to recommend against the transaction, as the number of domestic aluminium suppliers has dropped off significantly over the past several years and decades.
“Zhongwang’s attempt to take over Aleris is a critical transaction that comes at a time when the U.S. aluminum sector is extremely vulnerable as a result of unfair, illegal, predatory and protectionist practices – many of which included the activities of the ultimate beneficial owner in this transaction,” he wrote. “The aluminum sector is critical to America’s national security and, for that reason alone, the acquisition should be rejected. But, in our view, it is also critical to America’s economic security and we believe that national and economic security are inextricably intertwined.”
The CFIUS, which is chaired by the Treasury Secretary, reviews foreign investments in domestic firms, and how those potential investments may impact national security.