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The United Steelworkers union recently filed a petition with the U.S. International Trade Commission for the U.S. to invoke a global safeguard under Section 201 of U.S. trade law and impose tariffs of up to 50% on primary unwrought aluminum. Producers have, until recently, been reluctant to even attempt aluminum safeguards or petition section 201 for other metals.
This proceeding could have a significant impact on global aluminum producers, particularly from China, and U.S. importers and users of aluminum products.
The ITC must decide within 60 days whether the conditions for “critical circumstances” are met and whether to recommend provisional relief. Once the ITC has made its decision on the critical circumstances claim, regardless of whether or not it recommends provisional relief, it will begin an investigation under Section 201 of U.S. trade law.
The underlying ITC investigation typically takes 120 days — although it is allowed to take 150 days for complicated cases — and then has another 60 days to develop relief recommendations for the President of the United States. The ITC’s recommendations are then sent to the U.S. Trade Representative, which formulates a recommendation to the President who then has 50-60 days to decide whether or not to grant final phase relief.
The question for the ITC is whether primary aluminum is being imported into the U.S. “in such increased quantities as to be a substantial cause of serious injury, or the threat thereof” to the U.S. aluminum industry.
Imports of aluminum “semi-finished products,” which can be as little as ingots with minor finishing, from China into the U.S. increased 63% in 2015, according to the Aluminum Association, the trade association of North American producers.