Still, major problems remain.
Instead of bolstering the U.S. aluminum industry, the Section 232 program’s implementation is directly harming domestic aluminum workers while benefiting foreign metal producers, including China. The system is forcing U.S. aluminum companies into conflict with customers and suppliers, adding layers of bureaucratic burden and providing a price advantage to foreign aluminum manufacturers.
Importers can request an “exclusion” from paying the Section 232 tariffs on specific imported aluminum products. In some cases, these requests are reasonable and appropriate —when domestic producers do not have the capability to make the product in question. But the system is rife with abuse.
Exclusions have been granted for huge volumes of aluminum products with apparently no consideration of market realities, especially for flat-rolled products like sheet to make aluminum cans, foil for packaging and plate for industrial use.
So far, the Commerce Department has granted tariff exclusions on aluminum products covering more than 22 billion pounds of aluminum, including more than 4 billion pounds from China, the most granted for any single country. To cite one particularly egregious example, the department has granted around 5 billion pounds of aluminum can sheet exclusions this year alone — 30 percent larger than the size of the entire U.S. can sheet market.
Tariff exclusions incentivize many companies to import aluminum from foreign sources at below domestic prices as a first course of action, or to use their exclusions as leverage to negotiate lower prices from U.S. producers.
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June 03, 2020 at 05:03PM
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Want to help essential US manufacturing? Reform the aluminum tariff program - Roll Call
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