First set of tariffs on aluminum sheet announced - Trade Only Today

First set of tariffs on aluminum sheet announced

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Aluminum sheet is used to build aluminum fishing boats, pontoons and other marine products.  

Aluminum sheet is used to build aluminum fishing boats, pontoons and other marine products.  

The U.S. Commerce Department announced the countervailing tariff amounts on aluminum sheet from China, with varying amounts imposed on different Chinese suppliers that are scheduled to take effect within two to five business days.

The U.S. Department of Commerce will begin collecting these tariffs now and that some of these tariffs, namely for Chalco and all other companies, are expected to be imposed retroactively to January.

They will all go into effect when the Department of Commerce publishes its preliminary determination in the Federal Register, which usually takes between two and five business days, according to the National Marine Manufacturers Association.

Companies found to be non-cooperative, namely Chalco Ruimi and Chalco SWA Cold-Rolling will see a 113.3 percent tariff.

A 31.2 percent tariff will be imposed on Yongjie New Material Co. Ltd.

Henan Mingtai Al Industrial Co. Ltd. and its affiliate Zhengzhou Mingtai Industry Co. Ltd. will have a 34.99 percent duty on aluminum sheet.

All other Chinese companies will have a 33.1 percent tariff imposed upon them.

The tariff to be announced next week is the result of the countervailing investigation initiated by the Commerce Department to determine whether China is unfairly subsidizing its aluminum sheet industry.

A separate anti-dumping investigation will determine if China is dumping aluminum sheet. Both practices would allow the nation to sell aluminum sheet to the United States at low prices.

It’s the first time in three decades that the Department of Commerce has initiated such an investigation; typically, one is launched when an industry files a compliant.

Though China is the largest supplier of aluminum sheet to the United States, most U.S. boat manufacturers source their aluminum sheet in America, National Marine Manufacturers Association legal and federal affairs vice president Nicole Vasilaros told Trade Only Today. There isn’t enough supply, however, to meet demand, so smaller manufacturers sometimes source outside of the United States.

“Prior to this formal decision, our members were already feeling the effects of uncertain trade policy,” said NMMA president Thom Dammrich. “The countervailing duty, in addition to the Administration’s recently announced 10 percent Section 232 tariff on all aluminum imports, have sowed confusion and caused disruptions in both supply and price, significantly weakening positive sentiment among recreational boating businesses and forcing some to slash planned bonuses and other investments.”

Those tariffs will be on top of the 10 percent tariff President Trump is imposing on aluminum from outside the United States. Though he has temporarily exempted some countries and the European Union, that exemption ends on May 1, Vasilaros told Trade Only Today.

The European Union said last month it would impose a variety of retaliatory tariffs on U.S. exports in response to the 25 percent duty on steel, and included recreational boats on its list of targets. It has not yet issued a response to the aluminum duties.

There is also a fourth tariff on a list of approximately 1,300 products imported from China, including various marine products, the NMMA said.

"American manufacturers, like those in our industry, depend on a competitive global market and fair pricing, even if they exclusively use domestic aluminum,” said Dammrich. “In fact, it is estimated that more than 90 percent of the aluminum used by recreational boat manufacturers comes from domestic mills. The announcement by the Department of Commerce is a direct threat to the stability of the recreational boating market, and by extension hundreds of thousands of American jobs. The countervailing duty is expected to force domestic prices to skyrocket and further exacerbate supply shortages for marine manufacturers.”

“While presumably well-intentioned, the ruling fails to acknowledge the thriving American manufacturing sector, particularly of marine products,” Dammrich said. “The recreational boating industry has spent the past ten years rebounding from the Great Recession.”

In 2016, total recreational marine expenditures reached a high of $36 billion, and 95 percent of boats sold in the U.S. are made in the U.S., meaning those record sales benefit American businesses and workers alike, Dammrich said.

“This growth was expected to continue into 2018 and beyond, but the economic instability caused by these tariffs threatens our uniquely American sector and the 650,000 American workers it supports,” Dammrich said. “While China must be held accountable for their unfair trade practices, including theft of intellectual property, escalating tariffs imposed by the Administration harm American manufacturing industries. Tariffs aren’t the solution. Instead, we urge the Administration to deal with these issues through a negotiated trade agreement with China.”

Watch Vasilaros explain the tariffs here:

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