Section 232 tariff exemption remains important to US aluminum industry

In a letter to U.S. Trade Representative Robert Lighthizer marking the one-year anniversary of the removal of Section 232 aluminum tariffs on aluminum produced in North America, Aluminum Association President and CEO Tom Dobbins mentions the continued importance of the exemptions to U.S. aluminum companies and workers.

Dobbins writes, “The U.S. aluminum industry depends on a reliable source of Canadian primary aluminum, which has been a key part of the domestic supply chain and national security apparatus for decades, to meet demand for these aluminum products. Even if every U.S. aluminum smelter was operating at full capacity, aluminum manufacturers would still require a mix of domestic and imported primary aluminum as well as secondary production to meet the demands of U.S. manufacturers and consumers for aluminum products.”

Dobbins adds that 97 percent of U.S. aluminum industry jobs are in mid- and downstream production and processing. He says these jobs “depend on reliable aluminum supplies from our USMCA (United States-Mexico-Canada) trading partner.” Jobs at U.S. aerospace, automotive and other advanced manufacturing firms also rely on these imports, Dobbins says.

Levels of imported primary aluminum from Canada into the U.S. are generally consistent with volumes dating back prior to the imposition of the Section 232 tariffs and are down from peaks in 2017. While “the precise mix of the types of primary aluminum shipped may vary according to market conditions, total imports of primary material over time have stayed relatively constant,” Dobbins writes.

Dobbins also highlights continued issues in the implementation of the Section 232 program, particularly the aluminum product exclusion process. Since the beginning of the program, the Commerce Department has granted tariff exclusions on aluminum products covering more than 22 billion pounds of aluminum, including more than 4 billion pounds from China, the most granted for any single country.

“Even as successful anti-dumping and countervailing duty cases led to a sharp decline in unfairly traded imports of flat-rolled aluminum products from China, overall imports of semifabricated aluminum products into the United States increased by nearly 4 percent in 2019. Much of this aluminum was excluded by the Commerce Department from the Section 232 tariffs,” Dobbins notes. “Meanwhile, domestic production of semifabricated aluminum products declined more than 3 percent in 2019.”

Dobbins calls for increased import monitoring in North America to combat unfair global trade practices, especially subsidized aluminum overcapacity originating in China. He also says he supports efforts by the U.S. and Canadian governments to develop and expand import monitoring systems to include aluminum and aluminum products. Dobbins added that Mexico has not implemented any similar programs.

“I urge you to work with your counterparts in Mexico to ensure its government is adequately monitoring imports of aluminum products—particularly from nonmarket economies like China,” Dobbins states. “We stand ready to support the establishment of a North American Aluminum Trade Committee to discuss—and address—trade flow shifts and patterns.”