U.S. To Investigate Effects Of Aluminum Imports On U.S. National Security


May 15, 2017

On April 27, 2017 President Trump signed a memorandum calling on Secretary of Commerce Wilbur Ross to have his Department initiate an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the effects of aluminum imports on US national security. The inquiry will consider overcapacity, dumping, illegal subsidies, and other factors to determine whether aluminum imports threaten American economic security and military preparedness. 

According to remarks made by Secretary Ross, high-strength aluminum alloys are among the most commonly used materials to make military aircraft and aluminum armor plate is used to protect against explosives and other threats.

Trade statistics show that U.S. aluminum producers have been hurt badly by China's growing dominance in the industry. Since 2000 China has increased its share of the world aluminum market from less than 11 percent to nearly 53 percent, increasing production almost 12-fold. Meanwhile, in the United States, aluminum plants have shuttered and production has dropped 77 percent over the same period as aluminum prices plunged in the face of the onslaught from China. The U.S. share of the global market has dropped from a world-beating 16 percent in 2000 to less than 2 percent last year. U.S. imports of aluminum increased by 18% in 2016 compared with those in 2015 while at the same time U.S. production decreased. Eight U.S.-based smelters have either closed or curbed production since 2015. Only two U.S. smelters remain fully operational in the United States today. U.S. imports of semi-fabricated aluminum products from China grew 183 percent between 2012 through 2015 despite U.S. antidumping and countervailing duty orders on aluminum extrusion products from China. 

Section 232 of the Trade Expansion Act of 1962 gives the president the power to restrict imports and impose unlimited tariffs if a Commerce Department investigation finds they threaten national security. The move, which could lead to new tariffs on aluminum imports, is the second such 232 investigation the president has initiated. Last week, he asked Ross to look in to steel imports to determine whether they, too, pose a national security risk.

By law, Commerce has 270 days to present the Department’s findings and recommendations to the President. If the Secretary finds that an import threatens to impair U.S. national security, the President would then have 90 days to determine whether he concurs with the Department's finding and, if so, the action that must be taken to “adjust” the imports of the article and its derivatives so that such imports will not threaten to impair national security. Under Section 232, the President has broad powers to impose trade remedies, such as tariffs and quotas.

The investigation will include a formal request for public comment to be published in the Federal Register. For more information about Section 232 investigations, please visit: www.bis.doc.gov/232.

For further information or questions about this and other customs issues, contact George R. Tuttle, III at george.tuttle.iii@tuttlelaw.com or at (415) 986-8780.

 

George R. Tuttle, III is an attorney with the Law Offices of George R. Tuttle in the San Francisco Bay Area.

The information in this article is general in nature, and is not intended to constitute legal advice or to create an attorney-client relationship with respect to any event or occurrence, and may not be considered as such.

Copyright © 2017 by Tuttle Law Offices.  

All rights reserved.  Information has been obtained from sources believed to be reliable.  However, because of the possibility of human or mechanical error by our offices or by others, we do not guarantee the accuracy, adequacy, or completeness of any information and are not responsible for any errors, omissions, or for the results obtained from the use of such information.

 

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