Targeted Trade Enforcement on Chinese Common Alloy Aluminum Sheet a Critical Check on Unfair Trade Practices
ARLINGTON, VA. — Industry leaders joined Aluminum Association president & CEO Heidi Brock in testifying before the U.S. International Trade Commission (USITC) today. The testimony urged the USITC to reach a finding in the Commerce Department’s self-initiated case that unfairly-traded imports of common alloy aluminum sheet from China are injuring domestic producers. Senior officials from association member companies: Aleris, Arconic, Constellium, Jupiter, JW Aluminum and Novelis shared details on how Chinese common alloy aluminum sheet imports have injured U.S. producers and threatened a key market in the U.S. economy. According to information gathered by the USITC, in 2017, U.S. producers shipped nearly 2.4 billion pounds of common alloy sheet with a value of $3.45 billion.
You can view Brock’s full testimony here.
“The relief we seek will help ensure that the U.S. common alloy sheet market industry can compete fairly in the U.S.,” said Brock. “Our industry has not frequently used unfair trade laws to seek a level playing field. But the rapid increase in illegally subsidized aluminum overcapacity in China has left us no choice but to support targeted trade enforcement actions like these.”
In January, the USITC issued a unanimous preliminary injury determination that there is a reasonable indication unfairly-traded imports of common alloy aluminum sheet from China are causing injury to U.S. producers. In April, the Commerce Department announced a preliminary determination that imports of common alloy aluminum sheet from China are benefiting from unfair subsidies. As a result of that determination, U.S. importers of common alloy aluminum sheet from China were required to deposit estimated countervailing duties ranging from 31.20 to 113.30 percent of the value of the imported aluminum sheet at the time of importation. In June, the Commerce Department announced its preliminary determination that common alloy sheet from China was being dumped in the U.S. market at a margin of 91.47 percent of the value of the imported aluminum sheet.
Following these announcements, imports of Chinese common alloy sheet have declined from around 80 million pounds per month on average to around 4 million pounds per month. The USITC’s pre-hearing report indicates that U.S. producers increased production of common alloy sheet by about 2 percent between the first half of 2018 as compared to the first half of 2017. The value of shipments, average unit value and U.S. producers operating income also improved.
“We applaud Secretary Ross and the Commerce Department for their leadership in self-initiating these important investigations,” added Brock. “Ultimately, the best way to address persistent Chinese aluminum overcapacity is through negotiated, government-to-government agreement. But tough, targeted trade enforcement is an important tool for the industry in the meantime and sends a message to China that unfair trade activity will no longer be tolerated.”
The common alloy aluminum sheet subject to the unfair trade investigations is a flat-rolled aluminum product with a thickness of 6.3 mm or less, but greater than 0.2 mm, in coils or cut-to-length, regardless of width and is manufactured from a 1XXX-, 3XXX-, or 5XXX-series alloy. The aluminum sheet subject to investigation includes both unclad aluminum sheet, as well as multi-alloy, clad aluminum sheet. Common uses for the product under investigation include gutters and downspouts, building facades, street signs and license plates, electrical boxes, kitchen appliances and tractor-trailers for trucks. Excluded from the scope of the investigations is aluminum can stock that is suitable for use in the manufacture of aluminum beverage cans, lids or tabs.
The U.S. aluminum industry supports 162,000 direct jobs and nearly 700,000 jobs when indirect and induced impacts are considered. Further, the industry creates $71 billion in direct economic impact and $174 billion in total impact, nearly 1 percent of total U.S. GDP. While demand remains strong and investment continues in some segments, the industry has been operating in a very challenging environment for a number of years largely because of Chinese overcapacity distorting the marketplace.
To learn more about the Aluminum Association’s approach to global trade, please visit www.aluminum.org/TimeforAction.