The United Steelworkers union (USW) on April 18 filed a petition with the U.S. International Trade Commission (ITC) for the U.S. to invoke a global safeguard under Section 201 of U.S. trade law and impose tariffs of up to 50 percent on primary unwrought aluminum.
This proceeding could have significant impacts on global aluminum producers and U.S. importers and users of aluminum products.
The timetable is very brief: The ITC must decide within 60 days whether the conditions for “critical circumstances” are met and whether to recommend provisional relief. Once the ITC has made its decision on the critical circumstances claim, regardless of whether or not it recommended provisional relief, it will begin its underlying investigation under Section 201. The underlying ITC investigation typically takes 120 days – although it is allowed to take 150 days for complicated cases – and the ITC then has another 60 days to develop relief recommendations for the President. The ITC’s recommendations are then sent to the United States Trade Representative (USTR) which formulates a recommendation to the President who then has 50-60 days to decide whether or not to grant final phase relief.
The ITC and USTR will hear from both sides: The question for the ITC is whether primary aluminum is being imported into the United States “in such increased quantities as to be a substantial cause of serious injury, or the threat thereof” to the U.S. aluminum industry. The ITC will seek input from all market participants: U.S. producers, foreign producers, U.S. importers, and U.S. users. The President, through USTR, has the final say on any remedy recommended by the ITC, after further input from affected parties.
Invoking Section 201 safeguard measures is very rare. The last time was in the early 2000’s when President Bush imposed import restrictions on certain steel products. The process ahead is certain to be factually, legally and politically intense.