U.S. fires new salvo in escalating aluminium trade dispute – by Andy Home (Reuters U.S. – May 4, 2017)

http://www.reuters.com/

LONDON – “This is not a China-phobic program, this has to do with a global problem.”  That was how U.S. Commerce Secretary Wilbur Ross described the latest investigation into his country’s aluminium imports.

This one has been launched under Section 232(b) of the Trade Expansion Act of 1962, which lets a president act against imports on national security grounds. It follows hot on the heels of a similar Section 232 probe into U.S. imports of steel.

Although a Section 232 investigation is explicitly not supposed to be a substitute for trade complaints and despite Ross’s assurances it’s not about China, it’s hard to see this latest maneuver as anything other than exactly that. Namely, another turn of the screw on the Chinese authorities to do something about the country’s overcapacity and its exports.

As such, it overlays the current specific investigation into imports of Chinese foil and intertwines with a broader generic complaint about alleged subsidies to the Chinese aluminium sector lodged by the Obama administration with the World Trade Organization (WTO).

How China responds to this mounting pressure is fast becoming the single most important question in the global aluminium supply chain. The specific concerns behind this Section 232 investigation relate to the shrinkage of the U.S. aluminium smelter sector and its ability to produce enough metal to cover defense needs.

The United States has only five operating smelters and only one, according to Ross, capable of producing sufficiently high-purity aluminium for use in items such as combat aircraft.

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