Reinstating Section 232 Aluminum Tariffs the Wrong Approach for U.S. Industry

ARLINGTON, VA, Aug. 06, 2020 (GLOBE NEWSWIRE) -- Tom Dobbins, president & CEO of the Aluminum Association, issued the following statement today in response to the White House's decision to reinstate Section 232 tariffs on P1020 aluminum from Canada: 

“We’re incredibly disappointed that the administration failed to listen to the vast majority of domestic aluminum companies and users by reinstating Section 232 tariffs on Canadian aluminum. After years of complex negotiations and hard work by government, industry and other leaders across North America to make the U.S.-Mexico-Canada Agreement (USMCA) a reality, this ill-advised action on a key trading partner undermines the deal’s benefits at a time when U.S. businesses and consumers can least afford it.

While we understand that the president is attempting to help the aluminum industry, the volatility of implementing, removing and then re-imposing trade barriers threatens U.S. growth and investment at a time when domestic demand is already down nearly 25 percent year-to-date. This Groundhog’s Day revival of Section 232 tariffs on a key trading partner does not address the underlying issue of China’s overcapacity and makes U.S. aluminum companies less competitive when trying to sell their goods to industrial customers across North America. 

As the Aluminum Association has extensively documented, reports of a ‘surge’ of primary aluminum imports from Canada are grossly exaggerated. Data released just yesterday by the U.S. Census Bureau showed that overall primary aluminum imports from the U.S. to Canada declined about 2.6 percent from May to June and are below levels seen as recently as 2017. The few companies that stand to benefit from reinstated 232 tariffs on aluminum have cherry-picked government data and omitted important context to build their case, which unfortunately won the day.

The Aluminum Association will continue to monitor trade flows and advocate for the removal of Section 232 aluminum tariffs on all market economy countries. The industry strongly favors continued targeted trade enforcement that addresses the real problem in the market today – massive Chinese metal subsidies that drive massive overcapacity.”

While targeted trade enforcement activity, including successful antidumping and countervailing duty cases, has reduced imports of Chinese aluminum into the U.S. in recent years, China’s subsidy-driven overcapacity continues to grow. Over the past five years, aluminum overcapacity in China has grown by 60 percent and increasingly that metal is being exported to third party countries, further distorting global markets. In fact, according to recent figures from the National Bureau of Statistics (NBS), smelters in China produced 3.02 Mt of primary aluminum, the highest ever June amount. Total output is up 1.7 percent year-to-date. Despite this, Chinese producers brought some 680,000 tons/year of new aluminum production capacity on line in the first six months of 2020, according to researcher Antaike. That new capacity alone is equivalent to nearly 40 percent of total U.S. aluminum smelting capacity.

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About The Aluminum Association
The Aluminum Association represents aluminum production and jobs in the United States, ranging from primary production to value added products to recycling, as well as suppliers to the industry. The association is the industry’s leading voice, representing companies that make 70 percent of the aluminum and aluminum products shipped in North America. The association develops global standards, business intelligence, sustainability research and industry expertise for member companies, policymakers and the general public. The aluminum industry helps manufacturers produce sustainable and innovative products, including more fuel-efficient vehicles, recyclable packaging, greener buildings and modern electronics.  In the U.S., the aluminum industry supports $174 billion in economic activity and nearly 700,000 jobs. For more information visit https://www.aluminum.org, on Twitter @AluminumNews or at Facebook.com/AluminumAssociation.