Trade Cases

Section 201 Petition Filed by USW on Imports of Aluminum

April 19, 2016

The United Steelworkers filed a petition this week under Section 201 of U.S. trade law to attempt stem imports of primary unwrought aluminum. We are reporting on this because a number of companies/organizations having begun calling for the use of Section 201 to help stem unwanted steel imports (see article in tonight’s newsletter written by Lewis Leibowitz which addresses the use of Section 201 and Section 232 trade remedies).

The USW claims the volume of imported aluminum has seriously injured the American industry and threatens additional job and capacity losses. The USW petition claims the circumstance is critical which requires the ITC to make a preliminary decision within 60 days (June 17).

Under Section 201 the president can impose import restrictions through tariffs or quotas for up to five years. The president will have 30 days (July 18) following an affirmative ruling by the ITC in which to decide on provisional relief.

“A flood of foreign imports and failed trade policies have decimated American manufacturing,” said USW International President Leo W. Gerard. “Aluminum is vital to our national and economic security, and this case will help us retain and begin to rebuild domestic production of primary unwrought aluminum, which has reached critically low levels as a result of flooding imports. By the end of June, the industry will be operating at only 25 percent of 2011 production levels, and the total number of laid off workers will reach 6,500.

“In states all across the country, America’s aluminum producers have closed, idled or are at risk,” said Gerard. “Over just five years, we’ve seen the number of smelters plummet. In 2011 there were 14 smelters in the United States. Today there are only eight, of which only five are currently operating and one is expected to be idled at the end of June. Two of the five now operating are at 50 percent or less of capacity.”

“We refuse to watch another domestic manufacturing sector suffer from failed trade policies,” Gerard added. “This is a vital product for our aircraft and weapon systems. It’s used in construction, manufacturing and in electrical transmission.”

The petition will address imports from around the world but the primary sources currently flooding the U.S. originate in Canada, the Middle East, Russia and Venzuela.

“The USW’s trade case is intended to provide needed relief,” said Tom Conway, USW International Vice President. “We are requesting four years of increased tariffs, with the tariffs capped at a price allowing domestic producers to effectively operate and, hopefully, restore production.

The petition also calls for negotiations with our trading partners, principally China, seeking that they dismantle their overproduction and restore balance in global supply and demand.”

Production of aluminum in China grew 650.8 percent from 2001 to 2014, while its capacity increased 723.5 percent to 35 million metric tons.

“While the U.S. and other global aluminum firms are restructuring and cutting back production to minimize financial losses, the Chinese government is stepping in to expand capacity and encourage exports, placing the entire U.S. aluminum smelting system at risk,” said Conway.