Aluminum Association Calls for Quota-Free Exemptions for ‘Responsible’ Trading Partners

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The Aluminum Association sent a letter to President Donald Trump on Tuesday calling for quota-free tariff exemptions for all “responsible trading partners countries,” while also calling for specifically addressing Chinese overcapacity.

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“As you continue to evaluate and implement the Section 232 remedy, I urge you to grant permanent exemptions – without quotas – for our aluminum trading partners that operate as market economies,” said Heidi Brock, president and CEO of the Aluminum Association, in the letter. “I also encourage you to engage China to address structural aluminum overcapacity.”

The U.S. announced last month Section 232 tariffs of 25% and 10%, respectively, on steel and aluminum imports. Several countries have won temporary exemptions to date, including Canada, Mexico, Brazil, Argentina, Australia and the E.U. South Korea negotiated a long-term exemption as part of talks to revamp the U.S.-Korea Free Trade Agreement, with a quota imposed on South Korea  instead equivalent to 70% of average annual exports between 2015 and 2017.

In the past year since the U.S. launched its Section 232 probe in April 2017, the Aluminum Association has advocated for trade measures that do not hurt market-economy trading partners, instead calling for action to address Chinese overcapacity.

“The association’s member companies share the belief that China’s market-distorting behavior drives massive overcapacity in both primary aluminum production and downstream products,” Brock wrote. “Now that the United States is at a major turning point in trade negotiations with China, we see a historic opportunity for you to address this persistent problem once and for all.”

Brock argued 97% of U.S. aluminum production jobs are in mid- and downstream production, with many relying in some way on aluminum imports.

“We strongly believe that the Section 232 aluminum remedy should not disrupt current trading relationships with responsible trading partners,” Brock wrote. “Any quotas on these key partners will only further distort the market, particularly if new sanctions on Russian aluminum lead to tightened supply conditions.

“Quotas would paradoxically cause imports of semi-fabricated products from China to be more competitive in the U.S. market, as manufacturers scramble to find metal.”

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The full letter is available here.

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