Steel Products

Commerce Delivers Wait-and-See Report on Aluminum 232

January 23, 2018

The pile of unfinished paperwork on President Trump’s desk just got a little taller with Friday’s delivery of the Section 232 report on aluminum. It joins the Section 232 report on steel that hit the president’s desk on Jan. 11, starting the clock on a 90-day deadline for possible trade action.

On Jan. 19, the Commerce Department formally submitted to the president the results of its investigation into the effects of aluminum imports on U.S. national security. As with the steel report, Commerce and the White House have declined to comment on the findings, which will not be released to the public until after the president makes a decision. Section 232 gives President Trump the authority to impose tariffs or quotas on any or all aluminum imports or he may opt to take no action and let the trade filing lapse.

Do predatory imports of aluminum pose a threat to the domestic industry, and by extension to U.S. national security? The Aluminum Association certainly thinks so. “On behalf of the domestic aluminum industry, the Aluminum Association appreciates the president’s continued commitment to strong trade enforcement and a level playing field for U.S. producers. We expect that the report will recognize the significant role the aluminum industry plays in ensuring our nation’s security and welcome the opportunity to engage the administration on an appropriate remedy that will benefit the entire aluminum value chain,” said a statement from Aluminum Association President and CEO Heidi Brock. “The association supports actions that specifically address Chinese overcapacity and protect trading relationships between the U.S. and critical partner countries, which are crucial to a thriving domestic aluminum industry.”

The Aluminum Association urges caution, however, recommending that any remedies specifically address Chinese overcapacity and its effects while avoiding unintended consequences for U.S. production and jobs. Remedies should not interfere with the current trading relationship between the United States and critical trading partner countries, including Canada and the European Union, that operate as market economies, support U.S. aluminum production and jobs, and are highly integrated with North American supply chains, the trade group said.

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Chinese overproduction of aluminum has distorted the global marketplace. The U.S. aluminum industry has been badly hurt over the years by competition from cheap Chinese exports. Currently, the United States imports far more aluminum from Canada than from China. however. From January through November 2017, Canadian imports into the U.S. amounted to 6.77 billion pounds of aluminum products, compared with 1.24 billion pounds from China, according to data from the trade association. America’s ties with its closest ally Canada are integral to national security, thus most believe Canada will be exempt from any Section 232 sanctions.

Meanwhile, both aluminum and steel interests are left to wait and see what the president decides. Facing pressure to fulfill his campaign promises to protect American manufacturers from Chinese competition, many believe Trump will feel obligated to take some action. His decision this week to impose safeguards on imports of large washing machines and solar panels made in China and other countries makes intervening on behalf of the aluminum and steel industries appear that much more likely.