The U.S. Department of Commerce’s proposal to establish an aluminum import monitoring (AIM) system has prompted a number of suggestions from aluminum manufacturers, domestic and foreign, and users on how the proposed system could be improved.
The main concern of aluminum manufacturers and extruders in the U.S. is that the new system needs to be able to catch supplies of aluminum from China and Russia that are being funneled through Mexico, thereby avoiding the 10% tariff President Donald Trump imposed in 2018. The tariffs on aluminum and steel (25%) were lifted on imports from Mexico and Canada when the president signed the new U.S.-Mexico-Canada Agreement, which goes into effect on July 1 and replaces the North American Free Trade Agreement that went into effect on Jan. 1, 1994.
Jeffrey Henderson, president, Aluminum Extruders Council, pointed out that Chinese aluminum producer China Zhongwang Holdings Ltd. was recently indicted by the U.S. Department of Justice for avoiding payment of $1.8 billion in antidumping duties on aluminum. The chairman of Zhongwang, Zhongtian Liu, owns Aluminicaste Fundicion de Mexico, a Mexican aluminum producer. Zhongwang has engaged in several attempts to evade duties related to the holding and use of vast stockpiles of aluminum extrusions in Mexico and Vietnam.
To prevent illegal transshipment, Henderson said he wants the Commerce Department to require importers of aluminum to include mill test certificates for the various inputs consumed at every stage of production outside the U.S., from the primary aluminum to billet and the semifinished extrusion. The proposed AIM system would require importers to obtain licenses that include specific information, but not mill test certificates, which provide the specifications of the product, including the manufacturer name, the product quantity, and the results of the tests performed on the product. Henderson stated mill test certificates “would further verify the location of the producer of that aluminum to protect against evasion.”
The Aluminum Association wants the list of aluminum imports subject to licensing expanded to include scrap and secondary aluminum. Harmonized Tariff Schedule (HTS) heading 7602, which describes those products, was not included in the list of imports subject to the 10% aluminum tariffs imposed in 2018.
“A failure to include products classifiable under HTS heading 7602 from the AIM program could also provide a loophole for transshipment of products, a worrisome development currently seen in some European markets,” said Lauren Wilk, vice president, policy and international trade, Aluminum Association. In addition, the Aluminum Association wants the AIM program to track imports of aluminum wire and cable products (classifiable under HTS subheadings 7614.10.50, 7614.90.20, 7614.90.40, and 7614.90.50).
Commerce plans to publish “aggregate” statistics monthly on a website based on country of origin, country of smelt and pour, and aluminum product category and will include import quantity (metric tons), import customs value (U.S. dollars), and average unit value (dollars/metric ton). However, the Commerce Department will not report information if it would reveal business proprietary information.
Aluminum end users, like those represented by the Beer Institute, aren’t satisfied with all of this posturing. The end users and the associations that represent them want the data to show what U.S. companies are importing aluminum and how much material is coming from specific countries. In other words, they want more transparency of data.
The Beer Institute issued a statement that said increased transparency would “help end users push back against the price gouging they currently experience,” and that anything less than full transparency “will do little to address the problems end users of aluminum face both in terms of supply and tariff-burdened pricing.”
The Mexican aluminum industry is concerned that some of its domestic production might be viewed, unfairly, by U.S. Customs as transshipped product subject to 10% tariffs. Some Mexican aluminum groups, such as Cámara Nacional de la Industria del Aluminio and the Mexican Aluminum Institute, have stated that they think the Trump administration has failed to propose the “agreed-upon process for monitoring aluminum trade between both countries” specified in the May 17, 2019, joint statement by the United States and Mexico on Section 232 duties on steel and aluminum.
Source:- Thefabricator.com
