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FEATURE: Multilateral trade deals, not broad tariff, better for US aluminum: panel

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FEATURE: Multilateral trade deals, not broad tariff, better for US aluminum: panel


Tariffs have reduced Chinese imports, but not stopped harmful overcapacity

Overcapacity flows into other countries, necessitating further trade action

Pittsburgh — The US aluminum industry would benefit more from multilateral trade agreements instead of broad unilateral programs such as the Section 232 aluminum tariff, panelists said Oct. 22.

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The 10% aluminum tariff under Section 232 has been successful in keeping direct aluminum imports from China out of the US, but it has not prevented China from subsidizing its aluminum industry and building additional capacity, Aluminum Association CEO Tom Dobbins said during the group's annual meeting.

"The Chinese are unfairly subsidizing a key segment of their aluminum industry, and it distorts markets throughout the world," Dobbins said during a press briefing. "We need to do more to go after the direct problem, and the administration has done its best with tariffs to address this issue, but we don't think it's the best strategy."

Dobbins said the US and other countries should attempt to engage China's government in discussions to prevent Chinese producers from dumping aluminum into the US and other market economies.

"The tariffs have not been fully effective, but I don't think they ever could be," Dobbins said. "That's why a government-to-government, multilateral approach is what is necessary to address this issue."

Aluminum Association Chair and Novelis Senior Vice President Marco Palmieri said another drawback of the 10% aluminum tariff under Section 232 is that it impacts all countries equally, rather than only targeting the primary problem in China.

As Chinese overcapacity continues to rise, more of the country's exports are redirected to other market economies besides the US, and in turn, those industries increase their exports of products such as aluminum sheet and foil to the US, Palmieri added.

The rising shipments from other market economies have pushed US producers to petition for more trade cases, such as the 18-country common alloy sheet antidumping and countervailing duty cases.

"The trade tools that we have available, of course we use them because that is our resource to cope with the issue, but that has never been our preference," Palmieri said. "What changed was our will to really go and put these trade cases out because we felt it was time to do that."