During his campaign for president, Donald Trump was not quiet about his desire to improve the U.S. trade deficit with its trading partners. In particular, he railed against China on a regular basis. He remains focused on this task, and in late November he asked the U.S. Department of Commerce to begin an investigation into the possible dumping of certain aluminum stock into the U.S. market. If trade penalties result from this investigation, domestic manufacturers may be forced to pay more for aluminum in late 2018 or early 2019.
The Trump administration’s decision to initiate an investigation on whether China is either dumping or subsidizing imports of certain kinds of aluminum in the U.S. will lead to both statistical analysis and political calculation.
To begin, the U.S. Department of Commerce (DOC) will have to see whether unclad and multialloy clad aluminum sheet is being sold here below the price of manufacture (also known as dumping) or if the Chinese government is subsidizing those same aluminum producers. The DOC estimated a dumping margin of between 56.54 and 59.72 percent. Common uses for the products under investigation include gutters and downspouts, building facades, street signs and license plates, electrical boxes, kitchen appliances, and tractor-trailers hauled by semitrucks.
Once the DOC establishes the accuracy of its initial analysis, then the matter goes to the U.S. International Trade Commission (ITC), which decides whether domestic producers of common aluminum alloy sheet are materially injured or threatened with material injury. That decision would be expected to be made within 45 days of the ITC picking up the case. If domestic producers are believed to have suffered, the DOC makes the final determinations regarding dumping, subsidization, and injury. Such a decision likely wouldn’t occur until late 2018 or early 2019.
The Aluminum Association welcomed the investigation, which has some added impetus because the Trump administration initiated it instead of waiting for U.S. aluminum manufacturers to file complaints with U.S. trade officials, which is generally how these investigations get started. Trump railed about Chinese imports while campaigning for president, and the aluminum investigation is the latest evidence of his interest in this area. Trump also has loudly advocated for U.S. manufacturers broadly, and many of them rely on cheap Chinese aluminum.
Where this could get tricky politically is if groups like the National Association of Manufacturers or the Alliance for American Manufacturing oppose new tariffs on Chinese aluminum. Neither of those two groups responded to emails asking for their official positions.
When asked about his group’s position, Francis Dietz, vice president, public affairs, Air-conditioning, Heating, and Refrigeration Institute, responded with a letter his association sent to U.S. Trade Representative Robert E. Lighthizer earlier this year after Trump initiated a national security investigation on imported steel. That letter said in part: “…increasing the cost of steel and aluminum are of great consequence to the HVACR and water heating industry and its consumers.”
Liftoff for the LIFT
Manufacturing USA, the consortium of 14 manufacturing institutes including Lightweight Innovations for Tomorrow (LIFT), which is dedicated to lightweight metals manufacturing research, just released its 2016 annual report. The 2016 report contains an overview of the 14 manufacturing organizations, jointly funded by various federal agencies, with private-sector companies matching $2 for every dollar of federal funding.
LIFT, established in February 2014, concluded its second full year of operation with 10 new projects getting underway, some of them now near completion, according to Joe Steele, LIFT’s communications director. Some of those projects are:
- A melt processing project team successfully produced ductile cast iron differential cases with walls as thin as 2 mm at a Midwestern foundry. By reducing the wall thickness, the team achieved an overall 40 percent weight reduction on the component.
- Within the thermomechanical process (TMP) technology area, researchers successfully modeled the TMP history and resulting microstructure for linear friction-welded titanium for a compressor application.
- The joining and assembly project teams successfully produced a deckhouse prototype for a Coast Guard ship that featured fabricated parts with reduced distortion through the use of new weld and fixturing approaches. Also, new cost modeling tools have been developed and have demonstrated that the new approaches result in significant manufacturing cost savings in the shipyard.
Mr. Barlas, a freelance writer based in Washington, D.C., covers topics inside the Beltway.