The Commerce Department’s interim final rule expediting objection-free exclusion requests to the US Section 232 tariffs does not eliminate concerns raised about transparency, fairness and efficiency, the Aluminum Association said.
The Commerce Department’s interim final rule to expedite objection-free exclusion requests to the United States' Section 232 tariffs does not eliminate concerns raised about transparency, fairness and efficiency, or improve the exclusion and objection process, the Aluminum Association said on Tuesday November 13.
Commerce’s interim final rule - which updated the exclusion process by “expanding the grant of properly filed exclusion requests that receive no objections and present no national security concerns,” the final rule states - is a cause for concern to the association, given that the exclusions already granted are for volumes that would distort the US market and/or favor Chinese suppliers.
In common alloy aluminium sheet alone, more than 360 exclusions have been granted by Commerce's Bureau of Industry and Security (BIS), 306 of which include products from China, to foil buyers who sought exemptions. These products had been targeted in the common alloy aluminium sheet anti-dumping investigation.
Moreover, granted exclusions for Ta Chen International allow the company to import 1.8 billion lbs of common alloy sheet and plate duty free, with more than 1 billion lbs from China; and those for Mandel Metals allow it to import 600 million lbs of common alloy sheet and plate duty free. Those volumes alone exceed typical US import demand for the products.
“Generally it seems the department is not evaluating whether there is actually demand in the market for these large volumes and has granted the requests based simply on the absence of any objections. This is not a valid basis for the department to grant such large requests,” Aluminum Association president and chief executive officer Heidi Brock wrote in a November 13 letter to BIS director Hillary Hess.
The association identified other problems in the process, including a lack of transparency regarding each posted exclusion request’s exact product, country of origin, volumes and alloy specifications; a confusing objections process; a lack of public reports on the exclusions granted and pending; and the lack of a monitoring system to identify transshipments.
Decisions on only 20% of submitted exclusion requests in aluminium have been made, with some exclusion requests from six months ago still without a decision, the association said.
“The inherent uncertainty of the product exclusion process is actually adding an unnecessarily prolonged cost burden to our members and their customers and chilling investment in the aluminum industry rather than promoting domestic production,” Brock said.
There have been circumstances where the association's member companies and their customers have paid duties on products that they were expecting to see excluded by now, she added.
The Section 232 duties, 10% in the case of aluminium imports, have led the premium to soar in the US.
Fastmarkets AMM’s assessment of the P1020 duty-paid premium hit a more than three-year high of 22-23 cents per lb on April 10, one month following the announcement of the Section 232 tariffs. The premium has remained elevated, assessed at 19.25-19.75 cents per lb on November 13 - more than double the 9.4-9.5 cents per lb at the start of this year.