US trade measures must target China while excluding key American allies, representatives of the Aluminum Association said Wednesday.
Chinese overcapacity is the major issue plaguing the US primary aluminum industry, executives said on a call with reporters.
The US imposed a 10% tariff on all aluminum imports March 23. Select countries have been granted temporary exemptions until May 1.
"We believe that the administration should only focus 232 [actions] on China and exempt other countries," Heidi Brock, president of the association, said, before adding that Russia is "in a very different category."
On Friday, the US sanctioned Oleg Deripaska, head of EN + Group, which owns aluminum producer Rusal. The sanctions freeze assets within US jurisdiction and forbid US citizens from dealing with Rusal, and non-US citizens knowingly facilitating transactions could also face punishment. In response, the London Metal Exchange suspended the placing of Rusal metal on warrant, effective April 17, while CME Group revoked the brand's approved status of warranting and delivering metal from its physically deliverable aluminum futures (ALI) contract, effective immediately.
Industry leaders noted that the sanctions will tighten US aluminum supply, as Russian imports account for 12% of all primary aluminum demand in the US.
"With the reduction in imports from Russia, there's no need to further reduce imports from places like Canada and the Middle East," said Marco Palmieri of Novelis.
Brock suggested the Trump administration work with industry leaders to come to a negotiated agreement with China on overcapacity.
"We think that if the administration can look at Russian sanctions and focus 232 action on China, that would be very significant for the aluminum sector and would accomplish a lot of [the administration's] goals in supporting industry," she said.
The solutions must not ignore downstream sectors, however.
"There is a significant financial and job impact that could occur if policies don't recognize importance of mid and downstream markets," Brock said.
