AEC Advocates for Overhaul of Aluminum 232 Exclusions Process - Architects' Guide to Glass & Metal - Architects' Guide to Glass & Metal

AEC Advocates for Overhaul of Aluminum 232 Exclusions Process

July 28th, 2022 | Category: Architects' Guide to Glass and Metal, Industry News

The Aluminum Extruders Council (AEC) on July 20 testified in a U.S. International Trade Commission (USITC) hearing regarding the economic impact of Section 232 and 301 tariffs on U.S. industries. The AEC and its president, Jeff Henderson, say domestic extruders are put at a disadvantage by the current process.

“Despite some initial relief for the domestic extrusion industry from the Aluminum Section 232 tariffs for imported aluminum extrusions, the structure of the exclusions process later developed by the U.S. Department of Commerce, including the adoption of General Approved Exclusions (GAE) that do not require product-specific objections, has effectively gutted any relief for U.S. extruders from imports of extrusions the Aluminum 232 initially provided,” Henderson testified.

He added that the domestic industry is at a “severe disadvantage” when compared with imported extrusions. That’s due to higher primary metal costs from Section 232 tariffs, he says, paired with no protection from extrusion imports.

“The share of the U.S. market has shrunk from 80% to 75% since the 232 aluminum extrusion tariffs were revoked, which translates to 300 million pounds of extrusions or the equivalent of eight extrusion plants, or 2,000 direct jobs,” Henderson continued.

AEC advocates for an “immediate restructuring” of commerce’s 232 exclusions process complete with the removal of the GAE applicable to imported extrusions. Without that change, Henderson says 232 “utterly fails to protect domestic extruders from foreign manufacturers.”

“The structure of the existing Aluminum 232 exclusion process does not reflect the commercial realities of demand and production in the U.S. aluminum extrusion market,” he continued. “As a practical matter, this structure effectively renders it impossible for U.S. extruders to object to exclusion requests, and effectively negates any benefits we should be receiving due to the Aluminum 232.”

The issue at hand, according to Henderson and the AEC, is that there are 5 million extrusion designs in production, each with unique shapes. Because of those unique shapes, Henderson says it’s almost never the case that a U.S. extruder already has the specific tooling required for a specific job. But that doesn’t mean U.S. extruders can’t get the job done in a timely fashion.

“As a result, the structure of the current exclusion process effectively renders it impossible for U.S. extruders to object to almost any exclusion request,” the AEC wrote. “Consequently, commerce essentially created a situation in which U.S. extruders could not object to extrusion exclusion requests, thereby justifying commerce’s implementation of the GAE.”

With GAEs essentially covering the entire scope of aluminum extrusions, according to the AEC, the council believes the scope of aluminum extrusions “rests solely on a fatally flawed presumption embedded in the exclusion process.”

The AEC also cites China’s “overcapacity,” and “evasion” of antidumping and countervailing duty orders as factors in the growth of foreign competition. The council says that Midwest premiums have hit highs since 232 tariffs were imposed and that aluminum process and billet premiums saw highs in the U.S. in 2022.

“Unfair foreign competition is benefiting from both cheaper aluminum inputs and from blanket tariff exclusions in the form of GAEs – essentially negating the intent of the AD and CVD orders and the Aluminum 232 tariffs to protect the critical U.S. aluminum extrusion industry,” Henderson says.

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