The Aluminum Extruders Council (AEC) and members of the U.S. Senate have asked the Department of Commerce (DOC) to reform its tariff exclusion process for U.S. aluminum extrusion products.

AEC officials claim the General Approved Exclusions rules are “unfair to American aluminum extruders,” as a result, imports have risen 82%, and market penetration now exceeds 25%, the highest level in more than a decade.

Introduced in 2018, the tariffs were in response to increased aluminum imports weakening the U.S. economy, state DOC officials. As a result, the department enacted a 10% tariff to counter the increased aluminum imports, which led to a 31% decrease and increased domestic production by nearly a billion dollars between 2018-2021.

Introduced in 2018, the tariffs were in response to increased aluminum imports weakening the U.S. economy, state DOC officials. As a result, the department enacted a 10% tariff to counter the increased aluminum imports. Photo courtesy of Pixabay.

AEC officials say that while the tariffs appear effective on paper, they have not protected domestic aluminum extruders because the DOC adopted “overly broad tariff exclusion rules.”

The current extrusion process allows foreign-made extruded aluminum products to be imported tariff-free if a product cannot immediately “be produced in the U.S. in a sufficient and reasonably available amount or of satisfactory quality.” Should a U.S. company object, it must prove that it can produce the product in eight weeks or faster than a foreign competitor.

“The nature of custom manufacturing is that for the individual custom shape to be produced, it requires product dimensions and specifications to acquire the necessary tooling, which can take weeks,” state AEC officials. “The DOC nonetheless grants importers exemptions as if they were dealing with shelf-ready mass producers. U.S. aluminum extruders, in turn, have difficulty overturning these exclusions.”

Due to the challenges U.S. aluminum extruders face in meeting the Aluminum 232 exclusion criteria, the DOC has implemented a new process called the General Approved Exclusion. Under this process, importers of foreign-made aluminum extrusions are granted automatic exclusions from the Aluminum 232 tariffs without applying.

Extruded aluminum imports have increased by 82%, resulting in substantial losses for American producers in terms of potential sales since 2019. Notably, imports of extruded aluminum from Mexico have increased by 150%, which is thought to be helping Chinese transshipments.

U.S. Census Bureau data shows that imports from Mexico for aluminum alloy hollow profiles increased from $25.6 million in customs value in 2020 to $120.9 million in 2022, a 372% increase. The Aluminum Association released preliminary estimates as part of its monthly statistical report showing demand for the aluminum industry in the U.S. and Canada declining 3.5% through the first quarter of 2023. This follows estimated 4.8% demand growth through the end of 2022.