Aluminum Association updates on its U.S. - China Aluminum Trade Policy

The current imbalance in the aluminum supply/demand relationship inside China has spurred an oversupply which is resulting in two negative outcomes for the U.S. economy and the aluminum industry as a whole. It encourages illegal trade, trans-shipment, and re-melting of fabricated aluminum products, which is fundamentally impacting U.S. aluminum producers.

It has also created an oversupply of material from the most carbon intensive operations in the world, supplanting aluminum produced in less carbon intensive regions, including North America.

At the direction of the Aluminum Association’s Executive Committee Trade Working Group – chaired by Michelle O’Neill, Alcoa; and including John Barneson, Kaiser; Kip Smith, Noranda; John Gardner, Novelis; and Garney Scott, Scepter – the Association is calling for a series of common sense measures on the part of the U.S. and Chinese governments to ensure a level playing field where all global aluminum producers can compete fairly.

1. Improve Data Transparency: It is important that all global players, including the Chinese government, accurately track and disclose aluminum trade data in a timely manner. The Aluminum Association has made a formal request to the U.S. International Trade Commission (ITC) asking the World Customs Organization (WCO) examine harmonization of tariff codes in the aluminum industry so that re-melt of fabricated aluminum products and circumvention of duties and taxes on primary aluminum can be eliminated.

2. Develop GHG Goals for Chinese Production: In addition to capping coal consumption, China should set a specific goal to limit and reduce CO2 emissions from aluminum production in China. The Association issued a statement commending the Joint Presidential Statement by the United States and China which lays out concrete and achievable goals for addressing climate change. Ultimately, China’s aluminum industry contributes about 1% of total human GHG emissions annually, and would be the world’s 16th highest emitter if it were a country. Specific commitments to curb emissions so that China can reach its own goals set forth in Made in China 2025, should be implemented. But more specific action must occur in in a faster time frame.

3. Crack Down on Misclassification Issues: There’s growing evidence that some players are engaging in deliberate metal misclassification to avoid relevant trade duties, unconstrained by government enforcement. The Aluminum Association sent a letter to USTR calling for an investigation of deliberately misclassified metal coming out of China.

4. Maintain Long-Standing Export Duties: While the aluminum industry remains committed to supporting free and open trade between countries, the current situation in the Chinese market means that certain export duties are appropriate. The Aluminum Association issued a statement expressing strong concern about a recent call for the removal of a long-standing 15 percent tax on primary aluminum exported from China.

The Aluminum Association has also been advocating on Capitol Hill. Member company representatives from Alcoa, Hydro, Noranda and Novelis gave a briefing to the Congressional Aluminum Caucus Wednesday on the Chinese aluminum production and trade issues. They are also working with the Senate Finance Committee to request that the ITC conduct an immediate investigation regarding the effects of excess aluminum capacity in China on the U.S. economy, U.S. jobs, and the global competitiveness of U.S. aluminum producers.

The Association has made it clear that while the Association is not currently engaged in an active trade case against China; all options remain on the table. In fact, U.S.-China trade and environmental policies are very active topics of conversation amongst the leadership of the Association, and with the U.S. government.