July 25, 2022 

Wauconda, Illinois -- The Aluminum Extruders Council (AEC) provided testimony in the U.S. International Trade Commission (USITC) hearing regarding the Economic Impact of Section 232 and Section 301 Tariffs on U.S. Industries on July 20, 2022. AEC President Jeff Henderson spoke on behalf of the nearly 60 domestic AEC-member aluminum extrusion companies "operating hundreds of extrusion presses across 35 states, employing more than 60,000 people directly and another 125,000 indirectly."

Aluminum extrusions are used to manufacture autos and trucks, renewable energy components, train bodies and rail cars, aircraft and ships. Aluminum extrusions are instrumental in the production of national defense articles, including fighter jets and armored vehicles, and critical infrastructure such as for bridges.

In his testimony, Mr. Henderson explained that "despite some initial relief for the domestic extrusion industry from the Aluminum Section 232 tariffs for imported aluminum extrusions, the structure of the exclusions process later developed by the U.S. Department of Commerce, including the adoption of General Approved Exclusions (GAE) that do not require product-specific objections, has effectively gutted any relief for U.S. extruders from imports of extrusions the Aluminum 232 initially provided." He went on to say that "the domestic industry is once again at a severe disadvantage compared to imported aluminum extrusions due to higher primary metal costs from Section 232 tariffs, but with no protection from imports of extrusions. The share of the U.S. market has shrunk from 80 percent to 75 percent since the 232 aluminum extrusion tariffs were revoked, which translates to 300 million pounds of extrusions or the equivalent of eight extrusion plants, or 2,000 direct jobs."

AEC is advocating for an immediate restructuring of Commerce's Aluminum 232 exclusions process to remove the GAE applicable to imported extrusions, "otherwise the Aluminum 232 utterly fails to protect domestic extruders from foreign manufacturers," said Henderson.

"The structure of the existing Aluminum 232 exclusion process does not reflect the commercial realities of demand and production in the U.S. aluminum extrusion market. As a practical matter, this structure effectively renders it impossible for U.S. extruders to object to exclusion requests, and effectively negates any benefits we should be receiving due to the Aluminum 232," he explained.

With as many as five million different extrusion designs currently in production, custom extrusion shapes make up approximately 90 percent of all extrusion production in the U.S. Henderson went on to explain that "because every exclusion request refers to a unique shape, it is essentially never the case that a U.S. extruder will already have the specific tooling on hand necessary to produce that specific shape. As a result, the structure of the current exclusion process effectively renders it impossible for U.S. extruders to object to almost any exclusion request. To be clear, while a U.S. extruder may not have the specific necessary tooling for a unique extrusion shape in advance/in inventory, that in no way means that a U.S. extruder cannot produce the specified extrusion in a timely manner. There are no shapes U.S. extruders cannot produce."

Consequently, Commerce essentially created a situation in which U.S. extruders could not object to extrusion exclusion requests, thereby justifying Commerce's implementation of the GAE. Thus, Commerce's presumption to grant GAEs that cover essentially the entire scope of aluminum extrusions rests solely on a fatally flawed presumption embedded in the exclusion process. The implementation of the GAEs resulted in the highest level of aluminum imports since 2010 - this was when the aluminum extrusion industry first launched their AD and CVD cases against Chinese imported aluminum extrusions when China dominated 20 percent of the U.S. extrusions market.

U.S. extruders continue to face growing foreign competition despite the antidumping (AD) and countervailing duties (CVD) orders in place for aluminum extrusions from China. Four key factors in the continued threat from imports are:

  1. China's persistent overcapacity problem;
  2. Chinese evasion of the AD and CVD orders through transshipment and other evasion schemes;
  3. The structure of the existing Section 232 exclusion process makes it very difficult for domestic aluminum extrusion companies to participate; and
  4. The essential gutting of Section 232 relief for the extrusion industry due to the structure of the exclusion process and GAEs as operated by Commerce.

The Midwest Premiums hit highs since the Aluminum 232 tariffs were imposed, and aluminum process and billet premiums in the United States hit highs in 2022 - all of which conspired to make U.S. aluminum extruders easy targets for foreign competitors. This means that "unfair foreign competition is benefiting from both cheaper aluminum inputs and from blanket tariff exclusions in the form of GAEs - essentially negating the intent of the AD and CVD orders and the Aluminum 232 tariffs to protect the critical U.S. aluminum extrusion industry," said Henderson.

He concluded with the request that "the Commission recommend that the Aluminum 232 exclusions process be restructured to remove the GAE for aluminum extrusions, and that the exclusion process for aluminum extrusions going forward be amended to reflect the commercial realities of the aluminum extrusions industry and market."