The chairman of Alcoa proposes to increase the scope of Section 232 tax increase.

SMM5 March 21: recently, in a letter from Tom Dobbins, Chairman and CEO of Alcoa, to Robert Lighthizer, US Trade Representative, Tom Dobbins pointed out the importance of tariff exemption for Canada for the US aluminum industry. In addition, he also called on the U.S. Department of Commerce to increase the scope of Section 232 tax increase to reduce imports of aluminum rolled products.

In May 2019, the United States abolished punitive tariffs on Canadian steel and aluminum products, while Canada cancelled the corresponding retaliatory measures. In addition, the United States has suspended all lawsuits against Canada initiated within the World Trade Organization under Section 232 of the United States Trade expansion Act, and Canada has also suspended the relevant proceedings.

Clause 232 stipulates that the United States imposes a 25% tariff on imported steel and a 10% tariff on imported aluminum products.

He pointed out that the development of the US aluminum industry is inseparable from Canada's stable supply of primary aluminum, which has been an integral part of the country's supply chain for decades.

In addition, even if every US aluminum smelter is at full capacity, aluminum manufacturers still need to import primary aluminum and secondary products from abroad to meet demand. Ninety-seven per cent of jobs in the US aluminum industry involve production and processing in the middle and lower reaches, which is inseparable from the steady supply of raw materials from USMCA's trading partners. At present, imports of primary aluminum from Canada to the United States are basically the same as before the implementation of Section 232, although slightly lower than the peak in 2017.

Tom Dobbins said in the letter that the successful enforcement of anti-dumping and countervailing duty cases had led to a significant decline in unfair trade in rolled products such as aluminum foil and common alloy aluminum plates exported from China to the United States. Nevertheless, total imports of flat-rolled aluminum products from the United States actually increased in 2019 compared with 2018. In this regard, it is suggested that the US Department of Commerce should increase the scope of Section 232 tax increase.

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