Commerce Dept. Reveals Proposed Section 232 Remedies February 26, 2018

Late last week, the Department of Commerce released its findings following a 10-month Section 232 investigation into the national security implications of imported steel and aluminum. The department determined that such imports are in fact a threat and proposed the following remedy options for aluminum:

1.    tariff of at least 7.7% on all aluminum exports from all countries, or;

2.    tariff of 23.6% on all products from China, Hong Kong, Russia, Venezuela and Vietnam. All the other countries would be subject to quotas equal to 100% of their 2017 exports to the United States, or;

3.    quota on all imports from all countries equal to a maximum of 86.7% of their 2017 exports to the United States.

Commerce Secretary Wilbur Ross (pictured above at a hearing last spring) noted that the department’s goal from the measures was to raise U.S. capacity utilization to about 80 percent for each industry, from the current 48 percent in aluminum and 73 percent in steel. The Aluminum Association continues to review the full proposal but maintains that any final action by the president (which must come by April 19) adhere to the following key principles:

1.    Specifically address Chinese overcapacity and its effects, while avoiding unintended consequences for U.S. production and jobs.

2.    Not interfere with the current trading relationship between the United States and critical trading partner countries (including Canada, the European Union and others) that operate as market economies, support U.S. aluminum production and jobs, and are highly integrated with North American supply chains.

3.    Address the needs of the domestic aluminum value chain, including both primary and downstream U.S. production. Specifically, any action should ensure that producers and fabricators of intermediate aluminum products used in manufacturing finished products experience beneficial effects. 

4.    Adopt a monitoring system (similar to Steel Import Monitoring and Analysis System) for aluminum imports and particularly for imports from countries that pose a circumvention threat (Vietnam, Indonesia, Malaysia, Thailand, etc.).

 

Defense Secretary Jim Mattis recommended a targeted approach and suggested the White House put off any aluminum remedies even if the president takes action on steel.

Aluminum Association 

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