If duties are lifted, plaintiffs say no chance domestic industry will recover and grow.
Domestic aluminum producers petitioned the Commerce Department in 2017, claiming certain Chinese aluminum products (like foil) were being sold below cost. Commerce investigated and in its preliminary finding imposed countervailing duties ranging from 16.56 percent to 80.97 percent.
Flash forward to Thursday, when both the petitioners and their Chinese competitors made their cases at a U.S. International Trade Commission (ITC) hearing in Washington. Unless Commerce’s preliminary duties were made permanent, the domestic producers argued, any gains they hope to make in this market won’t last.
At Thursday’s hearing, U.S. aluminum executives ran through a list of numerous plants that have closed in the last few years as low-priced Chinese imports grew, including a Reynolds Aluminum plant in Richmond, Virginia, with the loss of 725 jobs and a Novelis plant in Louisville, Kentucky.
As we've written about before on this blog, Chinese aluminum production has exploded since 2000, while American production has dwindled. The Economic Policy Institute wrote last summer:
Chinese primary aluminum production increased from 2.5 million tons in 2000 to 31.2 million tons in 2016, an increase of more than 1,100 percent. China was responsible for 83 percent of the global increase in production. As a result, U.S. primary aluminum production fell 27 percent in the same period. China’s aluminum production capacity has grown even faster, increasing 1500 percent between 2000 and 2017, and it is responsible for 82 percent of the total, worldwide increase in primary aluminum capacity in this period.
In response, domestic manufacturers are arguing for more trade enforcement across the board. In addition to this ITC case, they’re pushing the Trump administration to announce enforcement actions resulting from the White House’s Section 232 national security investigation into aluminum imports. Aluminum is a key material in certain defense platforms (like jet fuselages) and there’s only one smelter left in the country that can make it to military specifications. It’s in Kentucky, and is the lifeblood of the surrounding community.
In an opinion published Friday, the smelter’s parent company CEO called on President Trump to use the Section 232 investigations to level the playing field for American aluminum workers and manufacturers.
In his State of the Union address, President Trump told the American people and the world that the era of economic surrender is over. “From now on,” he said, “we expect our trading relationships to be fair and … reciprocal.” Trump likewise told the World Economic Forum in Davos, Switzerland, this past Friday that we need “fair and reciprocal trade”, noting that “the United States will no longer turn a blind eye to unfair economic practices, including … industrial subsidies and pervasive, state-led economic planning.”
Simply put, we cannot have free trade if other countries don’t play by the rules.