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Tariff Hike Sought to Combat “Flood” of Aluminum Imports

Wednesday, April 20, 2016
Sandler, Travis & Rosenberg Trade Report

Alleging that a “flood” of imports “has seriously injured the American industry and threatens additional job and capacity losses,” the United Steelworkers filed April 18 a Section 201 global safeguard petition seeking four years of higher tariffs on imports of primary unwrought aluminum from all countries. According to a USW press release, primary unwrought aluminum is used in aircraft and weapon systems, construction, manufacturing and electrical transmission.

Most of the aluminum imported into the U.S. comes from Canada, the Middle East, Russia and Venezuela, the press release states, but the world has been going through a period of significant imbalance between supply and demand principally caused by “massive capacity additions in China.” This imbalance needs to be corrected, the USW said, and the petition calls for negotiations with trading partners, principally China, toward that end. In the meantime, the USW added, U.S. producers need relief.

The USW is therefore asking the International Trade Commission to make a critical circumstances finding and recommend that the president order a 50 percent additional duty on imports of primary unwrought aluminum that would remain in place while the ITC conducts a full section 201 investigation. The ITC’s preliminary critical circumstances determination is due by June 17 and if it is affirmative the president would have until July 18 to decide whether to provide provisional relief.

The USW is also seeking four years of safeguard duties that would start at 50 percent and decline to 35 percent in equal annual increments. An ITC evaluation of that request will follow its critical circumstances determination, and a final injury determination and recommendation on relief may not come until early 2017.

The ITC states that under section 201 domestic industries seriously injured or threatened with serious injury by increased imports may petition for import relief. If the ITC finds that the injury or threatened injury is serious and that the increased imports are a substantial cause (important and not less than any other cause), it recommends to the president relief that would prevent or remedy the injury and facilitate industry adjustment to import competition. The president makes the final decision on whether to provide relief and the amount of any such relief.

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