The aluminum industry in the United States was pleased with the Administration’s decision to pursue a Section 232 Investigation on the Effects of Imports of Aluminum on U.S. National Security.
It is not really anything new. The U.S. aluminum (and steel industry – see Peter Buxbaum article on page 2) industry believes cut-rate aluminum Chinese imports are undermining their business and when the Department of Commerce launched a 232 Investigation on April 26th they predictably were pleased. While seldom used (the last one was in iron and steel in 2001), Section 232 of the Trade Expansion Act gives the president authority to direct the Secretary of Commerce to investigate whether particular imports have national-security implications. The Commerce Department has 270 days to complete the investigation, although a conclusion can be forthcoming at any time during the process. Commerce at the conclusion of the investigation is then obligated to provide the president with policy recommendations – generally either tariffs or quotas on the commodity in question.
China’s Capacity Issue
During the announcement of the Section 232 investigation Secretary Wilbur Ross noted in his remarks, “U.S. imports of aluminum increased by 18% in 2016 compared with those in 2015, while at the same time U.S. production decreased. Eight U.S. based smelters have either closed or curbed production since 2015.
Only two U.S. smelters remain fully operational in the United States today. U.S. imports of semi-fabricated aluminum products from China grew 183% between 2012 through 2015.”
The obvious target of the Section 232 investigation is China’s aluminum exports to the U.S. The U.S. aluminum producers contend that China’s undercutting of the global market is hurting domestic smelters – citing Commerce Secretary Ross’s contention that the imports directly contributed to the smelter closures thus endangering the nation’s ability to produce aluminum and consequently impacting U.S. national security…
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