Aug 10

Dinan testifies on aluminum market conditions before the International Trade Commission

Attorney Donald R. Dinan testified before the United States International Trade Commission (“ITC”) on competitive conditions in the United States aluminum industry on behalf of domestic aluminum fabricators and extruders. He also submitted testimony on behalf of the United States industry in the national security investigation conducted by the Department of Commerce (“Commerce Department”) of imports of steel and aluminum into the United States.

The ITC held the hearing as part of an investigation, pursuant to section 332 of the Tariff Act of 1930 (19 U.S.C. 1332) on Competitive Conditions Affecting the U.S. Aluminum Industry. The investigation was at the request of the Committee on Ways and Means, U.S. House of Representatives. The focus of the investigation was China’s unfair trade in aluminum and fabricated aluminum products which threatened the existence of the American aluminum industry.

Mr. Dinan testified how China was dumping aluminum extrusions in the United States and was illegally subsidizing exports. He explained how Chinese overproduction and stockpiling was driving down the price of aluminum on the London Metal Exchange (“LME”) to levels where other global producers, including those in the United States, could not be profitable. Mr. Dinan noted that Chinese prices for extruded aluminum goods imported into the United States were below the cost of production, and in some instances, below the cost of the alumina from which the aluminum was made.

Based in part on the ITC’s report in the 332 investigation, the national security investigation was ordered by the President pursuant to section 232 of the Trade Expansion Act of 1962. The Commerce Department was instructed to investigate whether the quantity of or other circumstances relating to the importation of steel and aluminum were adversely affecting the national security of the United States by reducing domestic production and capacity below what is needed for national defense requirements.

Mr. Dinan of Goetz Fitzpatrick submitted testimony for the industry that emphasized the critical need of maintaining capacity and supply of high purity prime aluminum for defense and for downstream producers.

In his comments Mr. Dinan emphasized the economic pressure on the United States producers was being caused by China primarily. Mr. Dinan urged that any trade remedial action, including tariffs, must be tailored so that it affected China and not the United States’ close trading partners and allies.

Subsequent to the 232 investigation, President Trump imposed ten (10%) percent tariffs on imports of aluminum and twenty-five (25%) percent tariffs on steel pursuant to the National Security Industrial Base Regulations. The tariffs were imposed on imports from China, Canada, Mexico, and the European Union (“EU”), as well as other countries. The regulations provide however, for exemptions to be granted if United States companies can show that they can’t purchase the goods they need from a domestic metals producer. Over 20,000 waiver requests have been filed to date.

Goetz Fitzpatrick has prepared and filed these exemption requests for a waiver for its clients. So far, the Commerce Department is granting a little over fifty (50%) percent of the waiver requests. If a company is being adversely affected, either through increased prices or inadequate supply, for their steel and aluminum needs, it should seriously explore if it should file for an exemption. Mr. Dinan noted in an interview that “the major companies being hurt by these tariffs are the domestic producers who can’t get the steel and aluminum they need to manufacture parts, the auto and aerospace industries, and the construction industry.”

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