United States: United Steel Workers File Petition Requesting Section 201 Investigation Of Aluminum Imports

If you read one thing...

  • The United Steel Workers filed a petition with the U.S. International Trade Commission, requesting a safeguard tariff of up to 50 percent on imports of certain primary aluminum products pursuant to Section 201 of the Trade Act of 1974.
  • Section 201 investigations, unlike antidumping and countervailing duty investigations, generally cover imports from all supplier countries and may result in the imposition of tariffs, quotas or other restraints on imports.
  • Parties involved in the aluminum trade and related industries should prepare for participation in the investigation and the potential impact of a safeguard.

Background

On April 18, 2016, the United Steel Workers filed a petition with the U.S. International Trade Commission (ITC), requesting the initiation of an investigation under Section 201 of the Trade Act of 1974 on imports of primary unwrought aluminum. A Section 201 investigation, also known as a "safeguard" investigation, examines the impact on the domestic industry of all imports of a particular product without regard to their country of origin, with a limited exception for NAFTA countries. The purpose of the rare Section 201 remedy is to provide temporary import relief that will allow a U.S. industry facing serious import injury to adjust to unforeseen and increasing import competition. This Section 201 investigation is the first since 2001, when the ITC investigated imports of certain steel products, resulting in a safeguard of up to a 30 percent tariff rate on certain steel imports. In their petition, the United Steel Workers are seeking the imposition of a provisional 50 percent tariff during the pendency of the investigation and a graduated declining tariff rate for the four years following the investigation. This petition comes only 10 days after the ITC, at the request of the House Committee on Ways and Means, initiated a separate investigation of the global competitive conditions affecting the U.S. aluminum industry pursuant to Section 332(g) of the Tariff Act of 1930.

Scope of the ITC's Investigation

The ITC's investigation will cover all U.S. imports of primary unwrought aluminum. The petition specifically calls out imports from Canada, the United Arab Emirates, Russia, Qatar and Argentina, alleging that the United States is the largest export market for these supplier countries. The petition claims that imports from these five countries have significantly increased, causing a major decrease in domestic production. Production of primary unwrought aluminum is, according to the petition, down 26.5 percent during the first two months of 2016, compared to the same time period in 2015.

Under Section 201, the ITC is required to examine whether primary unwrought aluminum is being imported into the United States in such increased quantities as to be a "substantial cause" of "serious injury." This requirement is seen as more onerous for petitioners than the "material injury" standard in an antidumping or countervailing duty proceeding, because the increased imports must be "important and not less than any other cause" of the serious injury.

In making its determination on serious injury, the ITC will consider significant idling of productive facilities in the aluminum industry, the inability of a significant number of firms to carry out domestic production operations at a reasonable level of profit, and significant unemployment or underemployment in the U.S. industry. The ITC may also examine whether there is a threat of serious injury, in which case, it would consider a decline in sales or market share; a higher and growing inventory; and a downward trend in production, profit, wages, productivity or employment in the U.S. industry. The ITC will also consider the extent to which U.S. firms are unable to obtain adequate financing and the extent to which the U.S. market is the focal point for the diversion of exports of aluminum.

Notably, the petition alleges "critical circumstances," which lengthens the timeline of the investigation, but also allows for provisional relief to be granted before the conclusion of the investigation, potentially as soon as mid-July. The petitioners are requesting a provisional tariff of up to 50 percent, which, if implemented, would remain in effect for the balance of the investigation.

If the ITC makes an affirmative serious injury determination, it may recommend action to the president in the form of an increase in, or imposition of a duty, a tariff-rate quota, modification or imposition of a quantitative restriction; the provision of trade adjustment assistance; the initiation of international negotiations to address the underlying cause of the increase; or any other action that is likely to facilitate adjustment to import competition. Any remedy recommended by the ITC or ultimately ordered by the president must be limited to the degree necessary to remedy or prevent serious injury. In this case, the petitioners are requesting an additional tariff of 50 percent in the first year following the investigation, 45 percent in the second year, 40 percent in the third year and 35 percent in the fourth year.

Timing and Political Implications

The United Steel Workers filed their petition amidst mounting concern about excess global production capacity in the steel and aluminum sectors, and at the conclusion of hearings on this issue chaired by Commerce Secretary Pritzker and U.S. Trade Representative Froman. Froman, however, reacted to the Section 201 petition with skepticism, refraining from stating whether his office would recommend to the president the requested safeguard relief in the event that the ITC reaches an affirmative determination of serious injury.

The ITC report is due by October 15, 2016, or, at the latest, by November 14, 2016. The ITC must transmit its report to the president by December 14, 2016. The president will then have until February 12, 2017, to take action. The timing is notable because the 60-day time limit for presidential action will straddle the end of the Obama administration and the first few weeks of the next administration. Concerns about trade and the health of U.S. manufacturing industries have been at the forefront of both the Republican and Democratic presidential campaigns this year, potentially creating a political environment more amenable to the imposition of safeguard relief.

The case could also draw significant opposition and, potentially, legal challenges from affected exporting countries. In 2002, after completion of the last Section 201 investigation, the United States imposed a 30 percent tariff on steel imports. Brazil, China, the EU, Japan, New Zealand, Norway, South Korea and Switzerland challenged the United States at the World Trade Organization. The United States lost its case, and the EU threatened $2 billion in retaliatory measures against the U.S. steel, textiles and citrus fruit industries. Shortly thereafter, the Bush administration rescinded the safeguard measure.

Parties involved in the aluminum trade and related industries can expect similar vigorous opposition to the new Section 201 investigation, from both those countries that supply aluminum to the U.S. market and U.S. consuming and manufacturing industries that rely on competitively priced aluminum inputs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions