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Section 232 Investigation: AEC Calls for No Tariffs on Primary Aluminum

The Aluminum Extruders Council (AEC) testified at the public hearing of the Section 232 Investigation on the Effects of Imports of Aluminum on U.S. National Security held by the U.S. Department of Commerce.

The council said it is encouraged by the recognition of the importance of the domestic aluminum industry and its key role in the nation’s defense and critical infrastructure. For decades aluminum extrusions have been used in military applications ranging from plated material designed to protect American soldiers from IEDs to key components in the next generation of warplanes. Furthermore, nearly 40% of all extrusions consumed in the U.S. go into applications identified by Homeland Security as critical infrastructure.

The AEC’s Fair Trade Committee has successfully filed for protection from the unfair and illegal trade practices of China on behalf of U.S. extruders, with the trade orders finalized in April 2011. This has brought much-needed relief to the U.S. industry — bringing jobs back to American factories and enabling aluminum extruders to invest over $1.5 billion in much-needed capital projects. “However, the positive effects of these orders have come under attack as Chinese companies continually work to find ways to evade the tariffs,” explained the AEC in a press release. “Already two major transshipment schemes have been prosecuted and a myriad of scope and circumvention schemes have been dismantled. The AEC is now seeing a new round of dumped extrusions coming from Vietnam and other South East Asian nations. In many cases, the roots of these actions appear to be from China.” Therefore, the AEC called upon the Administration to place duties on imports from countries that enable Chinese extruders to circumvent the established aluminum extrusion antidumping and countervailing duties orders in this way.

However, the AEC also urged the Department of Commerce to not place tariffs on primary aluminum, noting that this action would not stop the threat from China’s overproduction of aluminum since that country does not export primary aluminum. The Council explained: “In fact, U.S. tariffs on primary aluminum would paradoxically support China’s policies of subsidizing their semi-fabricated aluminum producers through restraints on primary aluminum exports. Placing tariffs on good trading partners with market-based economies is the wrong action, directed at the wrong target.”

The International Fair Trade Alliance (IFTA) and the Curtain Wall Coalition (CWC) also spoke out against placing tariffs on primary aluminum.

“We agree with the U.S. domestic industry that tariffs on imported primary aluminum will in no way impact China’s predatory pricing practices nor strengthen the world’s position in negotiating an end to China’s relentless overproduction of aluminum,” said  Jochen Munch, IFTA chair and director Comercial Corporativo, Corporación Ecuatoriana de Aluminio Cedal S.A. in Duran, Ecuador. “If the United States intends to lead the effort to address the aluminum crisis, then this investigation must confront China’s illegal trade activities, and not restrict the legitimate actions of market-based countries across the globe, including Australia, Canada, and those in Latin America and the Middle East.”

“As a downstream consumer of aluminum and, more specifically, aluminum extrusions, we wish to add our voice to the many others that oppose any tariffs or restrictions on imported primary aluminum,” said the CWC. “Curtain wall producers in the United States must compete in a global market with curtain wall suppliers from across the globe. An import duty on primary aluminum exported to the United States will make the domestic industry even less competitive against low-cost countries, including China.”

“If there was one point that nearly all who testified last week agreed upon, it is that Chinese overproduction of aluminum is the issue that has created the aluminum crisis in the United States — plain and simple,” said Jeff Henderson, president of the AEC. “Any measure that misses that mark will instead work in the favor of the Chinese aluminum industry.”

The Aluminum Association (AA), the Aluminium Association of Canada (AAC), and European Aluminium also commented separately on the Section 232 Investigation regarding the U.S. aluminum industry.

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