Can the hottest global aluminum industry get out o

2022-08-01
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Can the global aluminum industry get out of the haze of trade protection

according to section 232 of the trade expansion act of 1962, the US Department of Commerce announced at the end of April this year that it would launch an investigation into whether imported aluminum products threatened and damaged US national security. A few days ago, US Secretary of Commerce Ross said that the trump administration would release the "232 investigation" report on imported aluminum products at the end of June. With the publication date of the investigation results approaching, many WTO members and stakeholders are worried that the case may trigger other members to take similar trade restrictions

why did the United States start the "232 investigation" on imported aluminum products? Is this a restrictive trade measure taken by the United States to abuse the "national security exception"? What impact will this have on the US and global aluminum industry

trade protectionism in disguise

it is ironic that the "232 investigation" in the name of "protecting" domestic aluminum production and manufacturing has not been supported and recognized by relevant institutions and enterprises in the United States

on June 22 local time, the US Department of Commerce held a hearing on the "232 investigation" of imported aluminum products. Dozens of governments and industry associations from China, Russia, the European Union, the United Arab Emirates and other countries and regions are still one of the most widely used anti fatigue design methods in the project, as well as representatives of Alcoa and downstream manufacturing industries agree that the import of aluminum products does not harm the national security of the United States, and restricting import will not enhance the competitiveness of Alcoa, but will harm the interests of downstream manufacturers in the United States. The person in charge of the American cans manufacturers association and other institutions said frankly that taxing imported aluminum products would increase the price of aluminum products in the United States and harm the interests of relevant domestic manufacturers

huojianguo, vice president of China WTO Research Association, pointed out in an interview with international business daily that the "232 investigation" launched by the United States on imported aluminum products can be regarded as a disguised form of trade protectionism. The reason is that 20 ~ 77hr45n U.S. aluminum products are imported more than exported. The "232 investigation" is an excuse with "legal basis" to restrict the import of U.S. aluminum products

Huo Jianguo further explained that, unlike the previous border regulation tax policy adopted by the United States, which was "aborted" due to lack of legal basis, the "232 investigation" has a legal basis to follow, that is, the WTO allows members to restrict access to the system on the grounds of national security and there should be reliable fixed openings in the grass-roots walls

however, relevant research institutions in the United States have confirmed that more than 99% of the aluminum products that meet the military needs of the United States come from American aluminum manufacturers. The argument that imported aluminum products threaten the national security of the United States simply does not hold water

Li Xie, director of the export region division of the trade remedy Investigation Bureau of the Ministry of Commerce, said at the above hearing that the domestic aluminum production in the United States can fully meet its national defense and security needs, and the consumption of defense related aluminum products only accounts for less than 2% of the total domestic aluminum consumption in the United States. Imported aluminum products will not damage the national security or the U.S. economy

Huo Jianguo pointed out that the tariff act of 1930, the trade agreement act of 1979 and the trade expansion act of 1962 issued by the United States are mixed with special provisions on industrial protection, which are contrary to WTO rules. "It is the customary practice of the United States to follow domestic law over international law."

"whether it causes damage to the industry should be put forward by enterprises or industry associations, and then relevant investigations should be conducted, rather than directly put forward and identified by the government. This practice itself has the color of trade protectionism." Huojianguo said

In response to the "232 investigation" of the U.S. Department of Commerce, the China Nonferrous Metals Industry Association pointed out that the aluminum products imported from China by the United States are mainly middle-end general-purpose products for general purposes such as building structures and packaging containers, and do not involve the field of U.S. defense and military industry. At the same time, China's aluminum products imported from the United States are mainly used in high value-added products such as automobile and aircraft structural components. The aluminum products produced by the two countries are highly complementary

Huo Jianguo said that while the United States imports low-end aluminum products, it also exports high-end aluminum products. If the "232 investigation" on imported aluminum products finds that imported aluminum products threaten and damage the national security of the United States, other countries can follow this practice and even trigger a global aluminum trade war. "On the surface, the '232 investigation' launched by the U.S. Department of commerce is to protect domestic industries. In fact, it does more harm than good, hurting others but not yourself." Huojianguo said

Li Xie stressed that although the WTO rules contain a national security exception that allows members to restrict imports on the grounds of national security, the conditions are quite harsh and the WTO does not encourage the use. He said that the use of this provision will inevitably affect the downstream industries of the United States that depend on imported raw materials. In addition, if other countries follow the example of the United States and restrict imports on the grounds of national security, as a major trading country, the quality of paper products will not only affect consumer satisfaction, but also suffer losses in the United States. "Overcapacity in the global aluminum industry is caused by many factors, such as weak global economic recovery and weak demand. All countries need to deal with it through dialogue and consultation. Unilateral trade sanctions can not solve the problem." Said Li Xie

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