The Aluminum 232 Remedy Should Target China
March 6, 2018; Wauconda, Illinois -- The Aluminum Extruders Council (AEC) cautions President Trump not to miss this historic opportunity to confront the real threat to the U.S. aluminum industry: China. The AEC believes that a global tariff on aluminum products will have the opposite effect than intended and actually play into China’s hands. China does not export primary aluminum to the U.S. but instead targets downstream aluminum markets with their unfair trade practices. A global tariff as proposed by the President will not stop those imports. AEC President Jeff Henderson stated “we simply cannot afford to get this wrong. The remedy should be a tariff targeted at China and countries that allow Chinese transshipment.”
Since 2009, the AEC has successfully battled the unfair and illegal trade practices of the Chinese aluminum extrusion industry. As a result of pursuing measures specifically targeted at China, the U.S. aluminum extrusion industry has been able to recover and grow. Employment has increased by 50% and the industry has invested well over one billion dollars into U.S. manufacturing and R&D.
AEC agrees with the Department of Defense in their February 22, 2018 memo to the Department of Commerce on this matter when they stated (our emphasis):
“DoD continues to be concerned about the negative impact on our key allies regarding the recommended options within the reports. However, DoD recognizes that among these reports' alternatives, targeted tariffs are more preferable than a global quota or global tariff. In addition, we recommend an interagency group further refine the targeted tariffs, so as to create incentives for trade partners to work with the U.S. on addressing the underlying issue of Chinese transshipment.”
A recent analysis released by Harbor Intelligence related to the Administration’s tariff announcement states, “US primary aluminum production will increase by at least 690,000 tonnes, but the expected rise in all-in prices is projected to destroy at least 600,000 tonnes of US primary aluminum demand due to an expected increase in scrap availability (638,000 tonnes) and a net decline of 50,000 tonnes of US aluminum downstream production (on lower demand from the US manufacturing sector).” The report goes on to say, “US primary aluminum smelting direct jobs will increase by around 1,900 positions, but the duty is expected to destroy at least 23,000 and as many as 90,000 direct jobs in the US manufacturing sector.”
AEC does not believe that this is the outcome the President wants to see. Therefore, AEC asks President Trump to reconsider his position and listen to testimony of industry leaders during the public testimony during the Section 232 Investigation hearing last summer. “Yes, we may see a crisis in the U.S. aluminum industry, and yes it threatens our national security,” said Henderson. “However, the threat is coming from China, and we must take this moment to do the right thing and confront them in the loudest possible way.”
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The AEC has led the U.S. aluminum extrusion industry in achieving level competition by winning tariff protection that offsets unfair trade practices of extruders/importers of aluminum profiles produced in China. The efforts have been of enormous value to domestic extruders and suppliers. They may have saved the industry. Conservatively, AEC estimates 800 million pounds per year of extrusions are being produced in the U.S. that would have otherwise been lost to China. For more information, visit www.AECFairTrade.org.
The Aluminum Extruders Council (AEC), established in 1950, is an international association dedicated to advancing the effective use of aluminum extrusion in North America. AEC is committed to bringing comprehensive information about extrusion's characteristics, applications, environmental benefits, design and technology to users, product designers, engineers and the academic community. Further, AEC is focused on enhancing the ability of its members to meet the emerging demands of the market through sharing knowledge and best practices. Advocacy programs ensure that aluminum extruders, suppliers and their products remain relevant and viable in an ever-changing legislative and regulatory climate. More than 120 member companies represent primary aluminum producers and other industry suppliers in addition to aluminum extruders operating hundreds of extrusion presses in hundreds of plants worldwide. For more information, visit the website at www.aec.org; contact AEC at email@example.com.